📌 What is a security?

A security is a legal term for financial assets such as stocks or bonds. When something is called a "security", it means it is subject to strict rules from the SEC (U.S. Securities and Exchange Commission), such as needing to be registered, regulated, and transparent to the public like a public company.

🤔 Why was Ripple/XRP taken to court?

The SEC accused Ripple of selling XRP as a security, even though they did not register it. This is akin to selling shares to the public without permission. Ripple denies this, stating that XRP is not a security, but a digital currency like Bitcoin or Ethereum.

⚖️ Court ruling in 2023

The judge ruled that:

$XRP sold on public exchanges (such as Binance, Coinbase, etc.) is NOT a security. Thus, ordinary investors who buy XRP are safe and not breaking the law.

XRP sold by Ripple directly to institutional investors (like large companies) is considered a security. Because transactions like this are viewed as "investments for profit", similar to buying and selling stocks.

✅ So what’s the conclusion?

XRP is not generally regarded as a security.

Ripple is only at fault for selling XRP to institutional investors without SEC permission.

XRP can be freely traded on crypto exchanges without needing to be treated like stocks.