Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 38

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 38
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 assets, including bitcoin, ether and XRP, declined significantly and may continue to decline as these cases advance through the federal court system.

On July 13, 2023, the S.D.N.Y. issued several key rulings in the case. Most notably, the court did not find that XRP was inherently a security. The court distinguished between the XRP token itself and the manner in which it was sold. The court found that the direct sale of XRP by the Ripple Defendants to certain sophisticated individuals and entities pursuant to written contracts did constitute the unregistered offer and sale of securities in violation of Section 5 of the Securities Act. However, the court also found that the programmatic sale of XRP by the Ripple Defendants over digital asset trading platforms did not constitute an unregistered sale of securities. Similarly, the court found that the XRP that Ripple Defendants granted to Ripple Labs employees as compensation or to third-party companies to incentivize the development of new applications for XRP and the XRP Ledger also did not constitute an unregistered sale of securities.

In July 2023, another judge in the S.D.N.Y., in litigation between the SEC and the issuer of the TerraUSD and LUNA digital assets, suggested that he disagreed with the approach underlying the XRP decision, as did a judge in the Northern District of California in the SEC’s case against Payward, Inc., while a judge in the District of Columbia sided with the XRP decision in the SEC’s case against Binance. In future litigation, other courts might disagree with the assessment that XRP is not a security. The seemingly inconsistent views of different district court judges, underscore the continuing uncertainty around which digital assets are securities, and demonstrate that such factors as how long a digital asset has been in existence, how widely held it is, how large its market capitalization is and that it has actual use in commercial transactions, ultimately may have no bearing on whether the SEC or a court will find it to be a security.

The S.D.N.Y. entered a final judgment in the case on August 7, 2024, imposing a $125,035,150 civil penalty against Ripple and an injunction prohibiting Ripple from violating the registration provisions of the Securities Act. Both the SEC and Ripple appealed the ruling. However, on August 7, 2025, the SEC, Ripple and other defendants filed a Joint Stipulation of Dismissal that dismisses the SEC’s appeal and Ripple’s cross-appeal pending in the Second Circuit, and resolves the