#MerlinTradingCompetition #GENIUSAct $XRP
Date: May 20, 2025
A recent legal study from the William & Mary Law School, the oldest existing law school in the United States, indicates that XRP buyers have gained a share of Ripple's future cash flow.
The report, prepared by University of Texas law professor James C. Spindler and published in May 2025, asserts that XRP buyers have, in essence, acquired an economic interest in Ripple's future income sources. However, the report also notes that there is legal ambiguity complicating the situation.
SMQKE, an independent cryptocurrency researcher, was the first to draw public attention to the academic report in a post on X, sparking discussions within the XRP community.
- Announcement -
XRP holders bought a share of Ripple's future cash flow
The report indicates that XRP, while it does not grant legal ownership or rights such as profits or voting rights, still functions as a means to participate in the future success of Ripple's business.
This suggests that investors are viewed as betting on Ripple's long-term profitability, specifically on the revenues from the blockchain-based transaction settlement system, when purchasing XRP. The report argued that the value of XRP depends on the success of Ripple's infrastructure.
Ripple and XRP's comment on the William & Mary Law Review
Ripple and XRP's comment on the William & Mary Law Review
Nevertheless, the report draws attention to an important nuance. It claimed that XRP does not provide formal protection for investors, as is typically the case with securities, such as enforceable rights or disclosures under U.S. Securities and Exchange Commission regulations.
This creates a paradox. While the economic relationship resembles an investment in Ripple, the legal structure avoids traditional regulatory oversight.
XRP's utility distinguishes it from ordinary bonds
Meanwhile, Ripple has long asserted that XRP is a functional token used to facilitate cross-border payments, not an investment contract. Interestingly, the report strongly acknowledged this argument.
- Announcement -
The research paper indicates that Ripple has built a system where XRP serves a real use case, thereby feeding transactions within its payment system, rather than merely existing as a speculative asset.
This suggests that XRP is essential for operating the system, as users are required to use the token to process transactions on the XRPL, and as an optional bridge asset in Ripple payments. This utility-focused design supports Ripple's claim that the token is fundamentally different from stocks or bonds.
The legal researcher also highlights the broader implications should Ripple's approach be widely adopted. According to the report, companies may offer slices of future cash flows in the form of tokens and distribute them across cryptocurrency markets, thereby bypassing regulatory oversight.
However, the report acknowledges that Ripple is one of the few cryptocurrency companies with a real business generating revenue, which lends credibility to its model.
Ripple and the SEC are already looking to conclude the longstanding lawsuit
The report was released at a time when Ripple and the U.S. Securities and Exchange Commission (SEC) recently agreed to abandon their appeals in the ongoing legal dispute. Both parties are now seeking court approval to finalize the settlement, indicating a potential end to one of the most prominent cryptocurrency enforcement battles in recent years.
The partial legal victory achieved by Ripple in 2023, which found that some XRP sales did not violate securities laws, has bolstered its position in the cryptocurrency industry.
The report from William & Mary indicates that while the company may have avoided traditional frameworks, its operational transparency and real-world use cases place it in a different category than purely speculative projects.
