Recently, Ripple Labs Inc. achieved a significant win in a federal class action lawsuit in the Northern District of California. The case, overseen by Judge Phyllis J. Hamilton, has been closely watched by the XRP community due to its potential implications on how the digital asset is classified under US securities law.
Implications of the Ruling for XRP
Judge Hamilton’s ruling granted Ripple’s motion for summary judgment, dismissing both federal and state class claims that XRP was sold as an unregistered security. Legal expert Fred Rispoli highlighted the importance of this ruling on social media, emphasizing that it was a procedural victory for Ripple.
While the class action claims were dismissed, the court did not definitively determine whether XRP is a security. Instead, it left it up to a jury to decide if XRP meets the criteria outlined in the Howey test, which determines securities classification under US law.
Despite the victory in the class action suit, the core issue of whether XRP is considered a security remains unresolved, as it is now left for a jury to decide based on the Howey test.
Legal experts have provided differing viewpoints on the ruling, highlighting complexities in interpreting digital asset regulations. The ambiguity around XRP’s classification continues to linger despite this procedural win for Ripple.
Evaluating the Ruling in Detail
The lawsuit involves class action claims against Ripple Labs Inc., its subsidiary XRP II, LLC, and Ripple’s CEO Bradley Garlinghouse, focusing on allegations related to the sale and marketing of XRP as an unregistered security.
Judge Hamilton made several critical decisions in the case:
- Favorable Rulings for Ripple: The court dismissed federal and state securities claims against Ripple, significantly narrowing the scope of the lawsuit.
- Ripple’s Losses: Despite the favorable rulings, the court allowed an individual claim against CEO Garlinghouse for misleading statements to proceed to trial.
At the time of reporting, XRP was trading at $0.4890.
