Key Highlights
- A federal court dismissed investor Bradley Sostack’s lawsuit against Ripple.
- The court ruled that XRP sales in 2017 were not a separate offering.
- The decision follows Ripple’s recent settlement with the SEC and closes another chapter in XRP-related lawsuits.
A U.S. federal appeals court has dismissed a lawsuit against Ripple Labs, the company behind the cryptocurrency XRP, ruling that the case was filed too late under securities law. The lawsuit, brought by investor Bradley Sostack, alleged that Ripple sold XRP as an unregistered security.
In a recent filing, the Ninth Circuit Court ruled that Ripple started offering XRP to the public in 2013, and U.S. law only allows claims like this to be filed within three years. The court also said that XRP sales in 2017 were not a separate offering. As a result, Ripple does not have to face federal securities claims from the investor.
Investor lawsuit dismissed for being late
Sostack filed his complaint in 2019, six years after XRP was first sold to the public. He argued that the monthly XRP sales from Ripple’s escrow account should count as ongoing offerings. However, the court rejected this claim. It said the 2017 XRP sales were part of the original offering in 2013 and did not reset the three-year time limit for lawsuits.
XRP was created in 2012 through the XRP Ledger. Ripple Labs received 80 billion of the 100 billion tokens that were created. The ledger became available to the public either in 2012 or early 2013. In 2017, Ripple began releasing one billion XRP each month from its holdings. Thousands of users bought XRP during these sales, including via the ledger’s built-in exchange.
Sostack claimed that these later sales made XRP a continuing offering, but the court disagreed, saying all XRP stayed the same and were part of the original sale.
Another legal win for Ripple
This is another major win for Ripple. It follows the firm’s settlement with the U.S. Securities and Exchange Commission (SEC) in August 2025, which ended a nearly five-year legal battle. The agency accused Ripple of raising $1.3 billion by selling XRP without registering it as a security. As part of the settlement, Ripple was ordered to pay a $125 million penalty to the SEC, which had already been placed in escrow.
XRP hasn’t really reacted to the recent development. At the time of writing, the token is trading for $1.90. This is just a modest 0.08% drop from the previous day, with a 14% surge in trading activity reaching about $2.39 billion in trading activity with its market cap sitting at $116 billion.
This dismissal is another big win for Ripple. The case added to the debate that questions whether XRP is an unregistered security, a topic that has caused a lot of talk in the crypto world.
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