The court published the conclusions in an order partially granting a motion for summary judgment in the seminal U.S. Securities and Exchange Commission case against the blockchain platform. The SEC in 2020 filed suit against the firm and its executives CEO Brad Garlinghouse and co-founder Christian Larsen alleging failure to register XRP as security before offering around $1.3 billion worth of tokens.
According to the order from the U.S. Court for the Southern District of New York, Ripple first sold around $728.9 million worth of XRP directly to institutional buyers, hedge funds and other parties. These"institutional sales" constituted the unregistered offer and sale of investment contracts in violation of federal securities law, the order said, as it found investors would have purchased XRP with the expectation that they would profit from Ripple's work.
The SEC’s motion for summary judgment was granted by the court as it applies to the institutional sale, and otherwise denied. "There is no evidence that a reasonable Programmatic Buyer, who was generally less sophisticated as an investor, shared similar “understandings and expectations” and could parse through the multiple documents and statements that the SEC highlights, which include statements across many social media platforms and news sites from a variety of Ripple speakers over an extended eight-year period," the order said.
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