Subscribe
Logo
Logo
  • Topics Icon Topics
    • AI Icon AI
    • Banking Icon Banking
    • Blockchain/DeFi Icon Blockchain/DeFi
    • Embedded Finance Icon Embedded Finance
    • Fraud/Identity Icon Fraud/Identity
    • Investing Icon Investing
    • Lending Icon Lending
    • Payments Icon Payments
    • Regulation Icon Regulation
    • Startups Icon Startups
  • Podcasts Icon Podcasts
  • Products Icon Products
    • Webinars Icon Webinars
    • White Papers Icon White Papers
  • TechWire Icon TechWire
  • Search
  • Subscribe
Reading
Ripple verdict: XRP not an investment contract
ShareTweet
ripple
Home
Crypto
Ripple verdict: XRP not an investment contract

Ripple verdict: XRP not an investment contract

Isabelle Castro Margaroli·
Crypto
·Jul. 13, 2023·2 min read

Three years in the making, U.S. District Judge Analisa Torres reached a verdict today, Thursday, July 13, on the SEC case against Ripple. 

The SEC originally filed the claim in 2020, stating that Ripple had violated securities law with the sale of their native token XRP. The regulators stated that the company had failed to register the token as a security before offering them to the market. 

There is a victory for the crypto company, but only partial. 

U.S. District Judge Analisa Torres
U.S. District Judge Analisa Torres

“The SEC’s motion is GRANTED in part and DENIED in part, and Defendants’ motion is GRANTED in part and DENIED in part.,” stated court documents. 

In a nuanced ruling that matches the clarity of the regulatory space, Torres found the sale of XRP in violation of securities law, but only in sales made to institutional investors. For sales made through exchanges and “other distributions,” the judge ruled in favor of Ripple. 

“XRP, as a digital token, is not in and of itself a “contract, transaction[,] or scheme” that embodies the Howey requirements of an investment contract,” stated the order. A ruling that could change the face of crypto regulation for years to come. 

RELATED:

  • So Gary, are cryptocurrencies securities?
  • Ripple and its cross-border revolution

Ripple not in violation of securities law when sold on exchanges.

The SEC had originally filed a complaint against Ripple for violation on three accounts: 

  1. Institutional Sales under written contracts for which it received $728 million;
  2. Programmatic Sales on digital asset exchanges for which it received $757 million.
  3. Other Distributions under written contracts for which it recorded $609 million in “consideration other than cash.”

With the Howey Test leading the basis of logic behind the verdict and rejecting Ripple’s “special ingredients for consideration,” Torres addressed each complaint in turn. 

The court order stated that Ripple initially sold $728 million in XRP to institutional buyers and that investors would have purchased the token with the expectation that they would make a profit. The funds are then said to have been invested to promote the token and develop use cases for XRP. As a result, “reasonable investors” would have expected the value of the token to increase and for token holders to make a profit. 

However, in the case of sales made on exchanges to buyers, “generally less sophisticated” as investors, Torres stated that the SEC could not make such a clear distinction. 

“There is no evidence that a reasonable Programmatic Buyer…could parse through the multiple documents and statements that the SEC highlights, which include statements (sometimes inconsistent) across many social media platforms and news sites from a variety of Ripple speakers (with different levels of authority) over an extended eight-year period,” stated the order. 

Ripple’s CEO, Brad Garlinghouse, is treating the verdict as a victory and took to Twitter to thank supporters a few moments after the announcement. 

We said in Dec 2020 that we were on the right side of the law, and will be on the right side of history. Thankful to everyone who helped us get to today’s decision – one that is for all crypto innovation in the US. More to come.

— Brad Garlinghouse (@bgarlinghouse) July 13, 2023
  • Isabelle Castro Margaroli
    Isabelle Castro Margaroli

    Isabelle is a journalist for Fintech Nexus News and leads the Fintech Coffee Break podcast.

    Isabelle's interest in fintech comes from a yearning to understand society's rapid digitalization and its potential, a topic she has often addressed during her academic pursuits and journalistic career.

    View all posts

Tags
crypto regulationripplesecXRP
Related

Crypto Firms Moving Overseas, Taking Talent With Them

eventus podcast

The Fintech Coffee Break – Johnathan Dixon, Eventus

europe

MiCA – The Good, Bad, and Ugly for crypto firms

Global newsletter: BlackRock calls out Gensler in crypto staredown

Popular Posts

Today:

  • Paraform Founders, Jeffrey Li and John KimFunded: Paraform raises $20M to put top recruiters, not AI, in the driver’s seat Jun. 27, 2025
  • Stylizedhouse-with-EKGFintech x the One Big Beautiful Bill Jun. 26, 2025
  • Globe-money-symbolsOPINION: Why Brazil and India are leading the global digital shift through payment innovation Jun. 24, 2025
  • Email-AI-pieceAvatar CEOs Have Entered the Meeting Jun. 18, 2025
  • WP UmbrellaTo Bank or Not to Bank: The ILC Question Jun. 5, 2025
  • Revised-AI-InvoiceAI Faces Skepticism. Startups Say: OK, Pay When it Works Jun. 25, 2025
  • PayabliFunded: Payments infrastructure co Payabli lands $28M Series B to AI-ify Jun. 20, 2025
  • TechNexus The AI IssueThe AI Paradox Jun. 18, 2025
  • GreenliteAI-Alex-WillGreenlite AI is on a mission to revolutionize banking compliance Jun. 10, 2025
  • TechNexus The AI IssueSteal Like an AI? Defining Fair Use & Creativity Jun. 25, 2025

This month:

  • WP UmbrellaTo Bank or Not to Bank: The ILC Question Jun. 5, 2025
  • DanMurphy-FN-headshotCFPB’s Next Open Banking Battle Begins Jun. 3, 2025
  • GreenliteAI-Alex-WillGreenlite AI is on a mission to revolutionize banking compliance Jun. 10, 2025
  • Current stablecoin adoptionWhy Banks (and Fintechs) Need to Embrace Stablecoins Today Jun. 12, 2025
  • ai-work-nexusWalkMe Vets Declare War on SaaS Bloat with $10M Seed for Autonomous Agents Jun. 10, 2025
  • Ben Hemani, Founding Partner at Bison VenturesThe Risk and Reward of Betting Big on AI’s Next Frontier Jun. 4, 2025
  • Jon StonaTips from Airwallex x McLaren on Making the Best of a Fintech Sponsorship  Jun. 18, 2025
  • Ironclad State of AI ReportThe Economics of AI Trust Jun. 11, 2025
  • Email-AI-pieceAvatar CEOs Have Entered the Meeting Jun. 18, 2025
  • TechNexus The AI IssueMeeker’s AI Bombshell + The VC Betting on AI Reshaping The Physical World  Jun. 4, 2025

  • About
  • Contact
  • Disclaimer
  • Privacy Policy
  • Terms
Subscribe
Copyright © 2025 Fintech Nexus
  • Topics
    • AI
    • Banking
    • Blockchain/DeFi
    • Embedded Finance
    • Fraud/Identity
    • Investing
    • Lending
    • Payments
    • Regulation
    • Startups
  • Podcasts
  • Products
    • Webinars
    • White Papers
  • TechWire
  • Contact Us
Start typing to see results or hit ESC to close
lis digital banking USA Lending Club UK
See all results