- Court ruling dismisses class action lawsuit, strengthening Ripple’s position.
- XRP’s status confirmed: not a security, major legal victory.
- Ripple wins lawsuit, clearing the path for continued growth.
Ripple has just celebrated a major legal win, as a United States court of appeals officially dismissed the class action lawsuit that threatened its operations. In a significant ruling, the Ninth Circuit dismissed Bradley Sostack’s claims that Ripple sold XRP as an unregistered security.
The court’s decision affirms that the lawsuit was filed too late and firmly rejects the idea that Ripple’s 2017 activities created a “new” security. With this legal battle now behind them, Ripple can move forward without the shadow of this lawsuit hanging over the company.
The lawsuit, filed in 2018 and consolidated in 2020, focused on whether Ripple’s sale of XRP was an illegal security offering. However, the court ruled that Sostack’s claims were barred by the statute of repose, a legal provision that limits the time frame within which a lawsuit can be filed.
According to the ruling, the clock for filing claims began in 2013, when Ripple first offered XRP to the public. This made the 2019 lawsuit six years too late, effectively dismissing Sostack’s claims.
Court Dismisses Claims Over “New” XRP Offering in 2017
Ripple’s defense successfully argued that XRP was not an unregistered security. The court emphasized that Ripple’s offering of XRP started in 2013 and that the cryptocurrency had not changed its fundamental nature between then and 2017. Despite Sostack’s attempt to argue that Ripple’s 2017 activities created a “new” offering, the court rejected this idea, ruling that XRP remained the same asset throughout this period.
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In 2017, Ripple introduced an escrow mechanism for XRP to manage its supply, but the court found that these actions did not alter the legal status of the asset. Ripple’s legal team stressed that XRP remained the same cryptocurrency, with no new securities being issued, despite the 2017 developments. This critical ruling effectively debunked the argument that Ripple’s marketing and management changes in 2017 could be treated as a separate offering.
Ripple’s Legal Victory Strengthens Cryptocurrency Regulatory Clarity
This court ruling has significant implications for Ripple and the broader cryptocurrency industry. The dismissal of the class action lawsuit clears Ripple of the accusations and reinforces the company’s position that XRP is not a security under U.S. law.
The ruling sets an important legal precedent for the treatment of cryptocurrencies and their regulatory status, adding clarity to ongoing debates about the classification of digital assets. Ripple’s legal victory could have a ripple effect on future regulatory decisions regarding cryptocurrencies.
With this case officially closed, Ripple’s success strengthens the argument that digital currencies like XRP should be treated differently from traditional financial securities. This ruling is a pivotal moment for the cryptocurrency community, as it reflects the growing need for clear regulatory frameworks to govern the rapidly evolving digital asset market.
Also Read: Major Cryptos Face Sudden Decline: What’s Behind Bitcoin, Ethereum, and XRP’s Drop?
