Three Years After the Ripple Ruling: XRP Victory Day

The ruling did not grant a blanket exemption for all XRP transactions, but it effectively dismantled the SEC’s claim that every trade followed the same legal pattern. Judge Torres determined that XRP itself was not an investment contract. Instead, she evaluated sales through the Howey test, concluding that programmatic trades on public exchanges lacked the requisite expectation of profit from Ripple’s efforts. Conversely, the court found that $728.9 million in direct institutional sales did qualify as unregistered securities offerings due to the nature of the written agreements and marketing involved.

Behind the legal victory, Ripple executives have revealed the existential strain of the multiyear battle. CEO Brad Garlinghouse noted that the company seriously considered shutting down after the SEC filed its complaint in December 2020. Internal legal counsel at the time reportedly suggested the company was unsavable, urging executives to pursue personal settlements. Instead, Ripple committed $150 million to a defense that eventually saw the SEC drop personal claims against Garlinghouse and executive chairman Chris Larsen in 2023.

The litigation concluded in August 2025, leaving a final judgment that included a $125.04 million civil penalty and a permanent injunction regarding future institutional sales. While the SEC had sought far more significant remedies, the final outcome solidified a transaction-based framework for the industry. Efforts by both parties to adjust the penalty and remove the injunction were rejected by the court, cementing the 2023 ruling as the definitive standard for the case.