I don't see how they could possibly claim it was a security. The guy filing the lawsuit lost money, and he's upset. That's fine, but that doesn't mean he's in the right.

A security is when there is pooled money or assets.

Some tokens are definitely securities, like tokens claiming to backed by real estate.

But pure currency tokens like XRP are just units of currency. The Ripple organization is popularizing the use of XRP, but they are not taking USD in exchange for XRP and then claiming that the person who traded the USD is entitled to anything but the XRP that they now have.

So Abe has USD.

Betty has XRP.

Abe and Betty trade.

Abe's XRP does not entitle him to any assets, performance, or anything of Betty's.

Therefore not a security.