A class action lawsuit challenging Ripple Labs’ sale of XRP tokens as unregistered securities will not proceed after the Ninth Circuit Court of Appeals this week upheld a lower court’s dismissal of the case.
The appeals court’s decision was first reported by Law360.
The lawsuit, filed by Bradley Sostack in 2019, alleges that Ripple Labs illegally sold XRP tokens as unregistered securities under federal law. Sostack argued that Ripple’s sales of XRP, including a 2017 distribution of tokens, violated the Securities Act of 1933.
The district court dismissed the claims, holding that they were barred by the three-year statute of repose.
Under this law, investors must bring claims within three years of a security being offered to the public. XRP was first offered publicly in 2013, and Sostack did not file his complaint until 2018–2019.
The court also found that the 2017 XRP release did not constitute a separate offering, so it did not extend the time limit for filing.
On appeal, the Ninth Circuit affirmed the lower court’s dismissal, agreeing that no material facts existed to challenge the statute of repose. The court rejected arguments that the later XRP distribution created a new offering or that the “economic reality” of XRP should change the timeline.
As a result, Sostack’s federal securities claims are time-barred, and Ripple’s legal victory was fully upheld.
This is a developing story.
Source: https://cryptobriefing.com/ripple-wins-appeal-xrp-unregistred-securities-litigation-dismissal/
