A California judge has dismissed class-action lawsuits against Ripple related to the sale of XRP, but has allowed one individual case to proceed to trial.
Class Action Claims Dismissed
Bradley Sostack, a former XRP investor, filed a class-action lawsuit in 2018, alleging that Ripple illegally sold XRP as an unregistered security and violated California advertising laws.
Judge Phyllis J. Hamilton dismissed both federal and state class-action claims that Ripple violated securities laws.
Individual Case to Proceed
However, Sostack also filed an individual case claiming that Ripple CEO Brad Garlinghouse made misleading statements about XRP.
In a 2017 interview, Garlinghouse said he was “very, very long XRP” and was “on the HODL side.” Sostack alleges that these statements were false, as Garlinghouse sold millions of XRP that year.
Judge Hamilton ruled that Sostack’s individual claim meets the “Howey test,” which determines whether a transaction is an investment contract.
Ripple’s Response
Ripple CEO Brad Garlinghouse welcomed the ruling, calling it a “big win” for the company. He argues that the decision does not affect the outcome of the SEC’s ongoing case against Ripple.
Garlinghouse maintains that his statements about XRP were accurate and that he is prepared to defend them in court.
