- The U.S. District Court for the Northern District of California dismissed major claims in a class action lawsuit against Ripple.
- Despite the victory, the court did not address whether XRP is a security. This critical question will be decided by a jury applying the Howey Test.
- Contrasting decisions by Judge Hamilton and Judge Analisa Torres highlight the complexity of the XRP case.
The U.S. District Court for the Northern District of California dismissed several major claims in a class action lawsuit against Ripple, providing a procedural victory for the company. Judge Phyllis Hamilton granted Ripple’s motion for summary judgment on federal class claims for unregistered and state law securities claims, eliminating most class action allegations against Ripple.
Ripple’s Chief Legal Officer, Stuart Alderoty, expressed satisfaction with the dismissal. However, the court did not address whether XRP is a security. This issue remains unresolved and will be decided by a jury.
The jury will apply the Howey Test to determine whether XRP meets the criteria for classification as a security. In a separate civil securities lawsuit against Ripple CEO Brad Garlinghouse, a California judge ruled that Garlinghouse will go to trial over allegations of making misleading statements in 2017 about XRP sales.
The contrasting decisions by Judge Hamilton and Judge Analisa Torres in the Southern District of New York highlight the complexity of the XRP case. Judge Torres ruled that XRP was not a security when sold to retail investors, as it did not satisfy all elements of the Howey Test.
Legal experts speculate on the potential for settlement in the California case due to low damages and the risk of a negative jury verdict for Ripple. Both parties have upcoming deadlines to reconsider their motions to seal parts of their briefs, with a final decision from the court expected soon.
Meanwhile, XRP’s price hovers near the local support level of $0.4922, with the market closely watching for any impact from the pending security decision. Ripple may have won a battle, but the war over XRP’s status continues, and its outcome could significantly affect the cryptocurrency’s price.
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