US Court Ruling on XRP's Security Status Turns Three

A US court ruling three years ago separated the digital asset XRP from its sales method, changing the direction of Ripple Labs and US cryptocurrency regulation.

The July 2023 summary judgment by U.S. District Judge Analisa Torres found that XRP itself is not treated as a security in all situations.

Torres applied the Howey test to determine whether something is an investment contract, and concluded that XRP transactions on public exchanges do not meet key requirements of the test.

The court accepted the SEC's argument regarding direct sales to institutional investors, ruling that XRP transactions worth about $728 million directly sold to institutions were unregistered securities offerings.