Ripple Secures Major Legal Victory as Ninth Circuit Rejects Class Action

TLDR

• The Ninth Circuit Court of Appeals dismissed a long-running class action lawsuit against Ripple and XRP.
• The court ruled that XRP’s status as a non-security, established in New York, remains unchanged.
• The plaintiff, Bradley Sostack, sought compensation for losses from Ripple’s XRP sales but filed the lawsuit too late.
• The court rejected the claim that Ripple’s 2017 actions, including escrow agreements, constituted a new securities offering.
• Ripple continues to push for regulatory clarity and supports the Market Clarity Act for consistent crypto regulations.

Ripple scored another legal victory this week as the Ninth Circuit Court of Appeals dismissed a federal class-action lawsuit. This ruling reinforces the earlier decision made in New York, establishing XRP as a non-security. The dismissal further strengthens Ripple’s position in ongoing legal battles and challenges from U.S. regulators.

Ninth Circuit Upholds Dismissal of Class Action Lawsuit

The Ninth Circuit ruled in favor of Ripple by rejecting a class action lawsuit filed by Bradley Sostack. The plaintiff claimed Ripple conducted an unregistered securities offering through the sale of XRP. Sostack sought compensation for losses totaling approximately $118,100, arguing Ripple’s actions created expectations of price appreciation.

The court ruled that Ripple’s sale of XRP, which began in 2013, triggered a statute of repose. This legal limitation prevents claims from being filed more than three years after an event. Since Sostack filed his lawsuit six years later, the court deemed it too late to pursue the case. Ripple’s sale of XRP in 2017, including escrow arrangements, did not constitute a new or separate securities offering, the court concluded.

Ripple Gains Another Legal Win, XRP Status Affirmed

Ripple’s victory continues to build momentum following the previous decision in New York. There, the court ruled XRP is not a security, which set a major precedent for the company. The Ninth Circuit ruling echoes this outcome, affirming that XRP’s status has not changed since its launch.

Ripple has faced multiple legal challenges over the years, but this ruling further distances the company from regulatory uncertainty. Ripple CEO Brad Garlinghouse has consistently advocated for clear regulations, and Ripple is pushing for the Market Clarity Act. This bill aims to provide transparency and consistency in the crypto industry.

Ripple’s legal team expressed satisfaction with the Ninth Circuit’s decision. “We are pleased with the court’s ruling, which further affirms that XRP is not a security,” a Ripple representative said. With the lawsuit officially closed, Ripple aims to continue engaging with U.S. lawmakers and industry leaders to seek regulatory clarity.

The White House has scheduled a meeting next week with crypto and banking executives to address ongoing regulatory concerns. While the Senate Banking Committee delayed markup over certain provisions, the government continues to focus on clear regulatory frameworks.

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