The XRP community is marking July 13 as “XRP Victory Day,” three years after a landmark split summary judgment in the U.S. Securities and Exchange Commission’s (SEC) case against Ripple Labs. In July 2023, U.S. District Judge Analisa Torres rejected the SEC’s theory that every XRP sale was automatically a securities offering and instead applied the Howey test transaction-by-transaction.
What the ruling said
- The court concluded that XRP “in and of itself” is not automatically an investment contract. Instead, Judge Torres examined different categories of sales separately.
- Programmatic sales on public exchanges—where XRP trades occur through blind bid-and-ask systems and buyers don’t know whether Ripple or another holder sold the tokens—were found not to qualify as investment contracts. The record did not show these buyers reasonably expected profits from Ripple’s efforts.
- By contrast, about $728.9 million in institutional sales—made under written agreements to sophisticated buyers, accompanied by contracts, marketing and stated use of proceeds—did create an expectation that Ripple’s work could increase XRP’s value. Those sales were ruled to have violated federal registration rules.
Aftermath and penalties
The July 2023 order did not end the litigation. The court later imposed a $125.04 million civil penalty and a permanent injunction aimed at preventing future unregistered institutional sales. That penalty was far lower than what the SEC had sought but confirmed a violation in that portion of Ripple’s business. In 2025 Ripple and the SEC jointly asked to reduce the penalty to $50 million and remove the injunction; Judge Torres denied the request. Both parties subsequently dismissed their appeals, and the case formally closed in August 2025.
Inside Ripple during the fight
Executives have since shared how close the company came to folding under the pressure. CEO Brad Garlinghouse said Ripple “almost decided to shut down” after the SEC filed suit in December 2020, citing the government’s vast resources as a major concern. Co-founder David Schwartz recalled that some lawyers advised the company was “unsavable” and urged leaders to seek personal settlements. Those anecdotes document internal discussions but do not demonstrate SEC intent to dismantle Ripple. Ripple reported spending roughly $150 million on its legal defense.
Broader impact
The final outcome established a transaction-based framework for XRP: public exchange sales received more favorable treatment, while direct institutional offerings were constrained by securities law. The SEC also dismissed pending personal claims against CEO Brad Garlinghouse and executive chairman Chris Larsen in 2023, removing a key personal-threat element from the case.
Why the crypto community cares
For many in the XRP ecosystem, the split decision validated routine retail exchange trading and removed a major regulatory overhang for everyday transactions, even as institutional channels face continued restrictions. July 13 has become an annual touchpoint for the community—a reminder of a pivotal U.S. court decision that reshaped how regulators and markets treat one of crypto’s oldest tokens.
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