A class action lawsuit challenging Ripple Labs’ sale of XRP tokens as unregistered securities will not proceed after the Ninth Circuit Court of Appeals this week upheld a lower court’s dismissal of the case. The court’s decision was first reported by Law360.

Filed in 2018, the lawsuit claims that Ripple Labs unlawfully sold XRP tokens as unregistered securities. Lead plaintiff Bradley Sostack argued that Ripple’s sales activity, including a large distribution of tokens in 2017, breached the Securities Act of 1933.

The case was dismissed in June 2024 when Judge Phyllis Hamilton found the claims untimely under federal law. The court said that XRP was first offered to the public in 2013, triggering a three-year deadline that expired well before Sostack filed his suit.

The court also found that the 2017 XRP release did not constitute a separate offering, so it did not extend the time limit for filing.

Sostack filed the notice of appeal in January 2025, seeking to overturn the district court’s summary judgment dismissal of class claims.

On appeal, the Ninth Circuit affirmed the lower court’s dismissal, agreeing that no material facts existed to challenge the statute of repose. The court rejected arguments that the later XRP distribution created a new offering or that the “economic reality” of XRP should change the timeline.

As a result, Sostack’s federal securities claims are time-barred, and Ripple’s early legal win is fully affirmed.