Sostack v. Ripple Labs, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 27, 2026
• Docket: 25-483
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 27 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

IN RE: RIPPLE LABLS, INC. Nos. 24-7599 & 25-483 LITAGATION D.C. No. BRADLEY SOSTACK, Lead Plaintiff on 4:18-cv-06753-PJH Behalf of Himself and the Federal and California State Securities Claims Classes, MEMORANDUM* Plaintiff-Appellant,

v.

RIPPLE LABS, INC., XRP II, LLC, and BRADLEY GARLINGHOUSE,

Defendants - Appellees.

Appeal from the United States District Court for the Northern District of California Phyllis J. Hamilton, District Judge, Presiding

Argued and Submitted December 4, 2025 San Francsico, California

Before: RAWLINSON, MILLER, and SANCHEZ, Circuit Judges.

Lead Plaintiff Bradley Sostack (Sostack) appeals the district court’s order

granting summary judgment in favor of Defendants-Appellees Ripple Labs, Inc.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. and its affiliates (Ripple) on Sostack’s federal securities claims. The district court

held that the three-year statute of repose in Section 13 of the Securities Act of 1933

(the Act) bars Sostack’s claim that Ripple issued unregistered securities in

violation of Section 12(a)(1) of the Act. We have jurisdiction under 28 U.S.C. §

1291 and we affirm.

XRP is a cryptocurrency. In 2012, a blockchain called the XRP Ledger (the

Ledger) was launched and its code created 100 billion XRP. Ripple Labs, Inc.

(Ripple) received 80 billion units of XRP. The Ledger was made available to the

public in either late 2012 or early 2013. In 2017, Ripple released its own XRP

holdings in monthly tranches of one billion XRP.

In January 2018, Sostack bought XRP on the Poloniex cryptocurrency

exchange. Later in 2018, a class action complaint was filed against Defendants-

Appellees and several others, alleging violations of the Act. In 2019, Sostack was

appointed lead plaintiff, and he filed a consolidated complaint, which he amended

in 2020. Defendants-Appellees subsequently filed a motion for summary

judgment, which the district court granted in part and denied in part. The district

court found that the federal securities claims were barred by the Act’s three-year

statute of repose.

We review the grant of summary judgment de novo. See Ambrosetti v.

Oregon Cath. Press, 151 F.4th 1211, 1218 (9th Cir. 2025). “Viewing the evidence

2 24-7599 & 25-483 in the light most favorable to the nonmoving party, we determine whether there are

any genuine issues of material fact and whether the district court correctly applied

the relevant substantive law. . . .” Damiano v. Grants Pass Sch. Dist. No. 7, 140

F.4th 1117, 1136 (9th Cir. 2025) (citation and internal quotation marks omitted).

Sostack has not raised a genuine issue of material fact as to whether the statute of

repose in Section 13 of the Act bars Sostack’s federal securities claims. Section 13

of the Act provides in pertinent part: “In no event shall any such action be brought

to enforce a liability created under Section 77k or 77l(a)(1) of this title more than

three years after the security was bona fide offered to the public. . . .” 15 U.S.C. §

77m.1

According to the record in this case, Ripple was offering XRP to the public

as early as 2013. It is undisputed that Ripple sold over 500 million XRP on the

Ledger’s built-in digital asset exchange. Those offers were made “to the public”

even if only technologically sophisticated consumers could navigate the Ledger to

purchase XRP. SEC v. Platforms Wireless Int’l Corp., 617 F.3d 1072, 1090-91

(9th Cir. 2010), as amended (defining the “public” as including “persons [who]

need the protection of the Securities Act,” rather than financially sophisticated

investors “able to fend for themselves”) (citation, alteration, and internal quotation

marks omitted). There is also no genuine dispute that Ripple’s offerings of XRP

1 Sostack filed his claims under Section 77l(a)(1) of the Act.

3 24-7599 & 25-483 were “bona fide” because Sostack does not allege that those offerings were

simulated, and as noted, thousands of users bought millions of units of XRP on

various exchanges, including the Ledger’s built-in exchange.

Sostack argues that the manner in which XRP was sold, distributed, and

advertised—as well as the nature of XRP itself—was changed so drastically in

2017 as to constitute a separate offering from the 2013 offering, or a wholly new

investment contract. But Sostack has failed to raise a material issue of fact that the

2013 offering and the 2017 offering were separate offerings. The nature of XRP

did not change between 2013 and 2017; all XRP cryptocurrency remained fungible

and interchangeable.

Sostack also proposes a legal framework ill-suited to the statute of repose.

Sostack invokes the five factors enumerated in SEC v. Murphy, 626 F.2d 633, 645

(9th Cir. 1980), to distinguish early offerings of XRP from later offerings of XRP.

However, Murphy applied those factors to “determin[e] whether to consider

apparently separate offerings as one integrated offering” for the purpose of

determining the applicability of a registration exemption. Id. at 641, 645. That test

has no application here. Finally, the “economic reality” theory posed by Sostack

finds no support in our precedent and would upend securities law as we know it.

See Cal. Pub. Emps.’ Ret. Sys. v. ANZ Sec., Inc., 582 U.S. 497, 515 (2017) (“The

purpose of a statute of repose . . . is to allow more certainty and reliability. . . .”).

4 24-7599 & 25-483 Because no material issue of fact was raised that the 2017 offering of XRP

was a separate offering, the three-year statute of repose began to run when XRP

was first offered to the public in 2013. See 15 U.S.C. § 77m. The original

complaint was not filed until 2018, and Sostack did not file his complaint until

2019. Thus, his federal securities claims are time-barred, and the district court did

not err in granting summary judgment in favor of Defendants-Appellees. See

Ambrosetti, 151 F.4th at 1218.

AFFIRMED.2

2 Because no other claims were included in the district court’s Rule 54(b) certification order, we limit our decision consistent with the district court’s order. See Air-Sea Forwarders, Inc. v. Air Asia Co. Ltd., 880 F.2d 176, 179 n.1 (9th Cir. 1989), as amended (stating that appellate jurisdiction only extends to “claims” the district court “include[d] in its Rule 54(b) order”); see also Jewel v. Nat’l Sec. Agency, 810 F.3d 622, 629 n.3 (9th Cir. 2015) (excluding from its discussion claims that “were not certified under Rule 54(b)”).

5 24-7599 & 25-483