The settlement resolves a class action filed by investor Bradley Sostack against Ripple Labs, XRP II LLC, and CEO Bradley Garlinghouse, stemming from allegations of misleading statements in connection with XRP token sales. The lawsuit survived multiple rounds of dismissal motions, with only one claim under California securities law remaining after a June 2024 summary judgment ruling.
Under the settlement terms approved by Judge Phyllis J. Hamilton, Ripple agreed to waive $210,591.52 in court costs that had been awarded against Sostack in December 2024, plus an additional $345.60 from a Ninth Circuit mandate. The company also waived any rights to recover attorneys' fees from the plaintiff or his counsel, with each side bearing its own legal costs going forward.
The case had a lengthy procedural history, with the court granting partial summary judgment in June 2024 that eliminated most claims but allowed Sostock's individual claim under California Corporations Code sections 25501 and 25504.1 to proceed. The matter went through appeals and cost determinations before reaching the current settlement.
The resolution marks another significant development in Ripple's ongoing legal battles over XRP's regulatory status. While this case focused on California securities law violations rather than federal SEC enforcement, the settlement eliminates a potential adverse judgment that could have influenced other cryptocurrency litigation nationwide.