US Appeals Court upholds dismissal of investor lawsuit, ruling that XRP claims were time-barred under the statute of repose.
The Ninth Circuit Court of Appeals has upheld the dismissal of a major class-action lawsuit against Ripple, dealing a decisive blow to investors who alleged the company conducted an unregistered securities offering through XRP sales.
On January 27, 2026, the Ninth Circuit Court of Appeals affirmed the dismissal of a California federal securities class action against Ripple Labs and its executives. The lawsuit, led by plaintiff Bradley Sostack, alleged that Ripple conducted an unregistered securities offering through XRP sales.
The court ruled that the claims were time-barred under the three-year statute of repose for securities violations. Since XRP was already publicly offered by 2013, the limitations period expired around 2016, making the 2019 lawsuit filing six years too late to proceed under federal securities law.
The Ninth Circuit also rejected arguments that Ripple's 2017 activities, including escrow arrangements and renewed marketing efforts, constituted a new securities offering that would restart the clock.
This ruling reinforces regulatory clarity for XRP by establishing that secondary market trades of the token are not considered unregistered securities transactions. The dismissal removes a significant legal overhang that had persisted in California courts for years.
Importantly, this case is separate from the SEC vs. Ripple lawsuit, which concluded in August 2025 when both parties agreed to drop their appeals. Judge Analisa Torres had previously ruled that XRP is not a security when sold in public retail transactions, while certain institutional sales were deemed securities transactions.
With both the SEC case and this class-action now resolved, Ripple has cleared its major legal hurdles. XRP spot ETFs launched in November 2025 have attracted over $1.6 billion in assets under management. Market analysts remain divided on price trajectory, with Standard Chartered projecting $8 while others warn of potential pullbacks below $2.
The Ninth Circuit ruling marks another step toward regulatory certainty for XRP holders. With class-action risks eliminated and the SEC settlement finalized, Ripple can focus on expanding its enterprise blockchain solutions and RLUSD stablecoin initiatives.
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