You Won’t Believe Why This Court Dismissed Ripple’s Case

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The Ninth Circuit, that most impeccable of jurists with a taste for drama and a sigh of inevitability, has brought to a close one of the crypto world’s longest-running farces by dismissing the Sostack v. Ripple Labs class action. One might say the curtain falls with the inevitability of a well-bred sigh.

The appellate panel declared that lead plaintiff Bradley Sostack’s federal securities claims were time-barred by the Securities Act’s three-year statute of repose, a clock so precise it could have been carved on a diamond and kept in a clockwork heart.

The nature of the lawsuit

The matter began as a consolidated class action filed in 2018, centering on allegations that Ripple Labs, its subsidiary XRP II, LLC, and Chief Executive Brad Garlinghouse violated federal securities laws by selling XRP as an unregistered security. A noble cause, indeed, if noble causes came with a chart and a calendar.

Bradley Sostack, appointed lead plaintiff by fate and a judge’s patience, purchased XRP in January 2018 during the zenith of the crypto bull market-an era when diamonds were minted as tokens and every tweet was a potential fortune.

The plucky plaintiff pursued restitution for losses after a price crash, contending that Ripple had conducted an illegal public offering without the proper registration statement. A melodrama, perhaps, but with the sensational flair of a ledger entry gone awry.

Yet the suit collided with a stern federal deadline-the statute of repose-like a gentleman colliding with a wall at the pace of a rumor becoming fact.

The “three-year clock”

Under Section 13 of the Securities Act, no action for unregistered sales may be brought more than three years after the security was bona fide offered to the public. A clockwork rule, if there ever was one.

The Ninth Circuit agreed with the district court that this clock began its merciless tick in 2013, not in 2017 or 2018.

The court noted that Ripple had made XRP available to the public as early as 2013, selling over 500 million tokens on the XRP Ledger’s built-in exchange during that very year.

From that 2013 start date, the three-year window expired in 2016. It is a curious thing when time behaves with such punctuality; even the most restless ambitions must bow to a calendar.

Since Sostack did not file his original complaint until 2018, his claims arrived at justice’s door as a guest who should have left earlier but chose to linger for the sake of drama.

“His federal securities claims are time-barred,” the panel declared, affirming the lower court’s summary judgment in Ripple’s favor with a scholar’s cool and a comedian’s wink.

Another failed attempt

In a bid to salvage the case, the plaintiffs proposed that Ripple’s activities in 2017 constituted a new offering, thereby restarting the three-year clock. It was a theory that wore a mask of novelty but spoke in the language of repetition.

The Ninth Circuit rejected this notion with the precision of a courtly critic, dismantling the idea that the 2017 sales were legally distinct from the 2013 launch.

“The nature of XRP did not change between 2013 and 2017,” the court stated in its memorandum. “All XRP cryptocurrency remained fungible and interchangeable.”

 

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2026-01-28 20:44