Ripple Labs clinched another legal victory as the Ninth Circuit Court of Appeals upheld the dismissal of a class action lawsuit against the company. The ruling, handed down January 27, 2026, marked the end of a years-long battle in the case of Sostack v. Ripple Labs. Talk about a weight off their shoulders.
Bradley Sostack’s lawsuit, filed back in 2018 or 2019, claimed he lost a whopping $118,100 investing in XRP. He argued Ripple violated securities laws by selling unregistered securities. Nice try. The court wasn’t buying it.
At the heart of the case was a boring but essential legal technicality – the statute of repose. This three-year time limit meant Sostack’s claims were about six years too late. XRP had been publicly offered since 2013, when over 500 million tokens were sold through the Ledger’s built-in exchange. The lawsuit primarily focused on Ripple’s 2017 distribution of tokens, which Sostack claimed violated securities regulations. Case closed.
The statute of repose shut down Sostack’s claims like a bouncer – three years to file, six years too late.
Sostack’s legal team tried to argue that 2017 escrow releases constituted a new offering, fundamentally resetting the clock. The court shot that down faster than you can say “cryptocurrency.” XRP remained the same fungible digital asset throughout. The Ninth Circuit firmly determined that no material facts existed to challenge the statute of repose application. No do-overs here.
The dismissal focused purely on timing rather than whether XRP was actually a security. Still, markets took it as another sign of XRP’s regulatory stabilization. This victory aligns with Ripple’s previous win when a New York court ruled XRP wasn’t a security in its transactions to institutional buyers.
This isn’t Ripple’s first rodeo with regulators. Their separate battle with the SEC concluded earlier when the new pro-crypto administration took office. That case was voluntarily withdrawn. Lucky timing.
The Ninth Circuit’s decision, first reported by Law360 as a not-for-publication memorandum, reinforces precedent on digital asset offering timelines. Ripple issued no immediate comment after the ruling. Sometimes silence speaks volumes.
