SEC v. Ripple Labs, Inc.
Summary
The first major split-decision on token sales. Judge Torres distinguished among three ways XRP was distributed: "Institutional Sales" to sophisticated buyers under written contracts WERE unregistered securities; "Programmatic Sales" to anonymous buyers on exchanges were NOT; and certain other distributions were not investment contracts.
Holdings
Is XRP itself a security?
The token by itself is not a security; the analysis turns on the circumstances of each offer and sale, not on the asset.
Quote as reported (operator-verify): “XRP, as a digital token, is not in and of itself a "contract, transaction[,] or scheme" that embodies the Howey requirements”
Source: Mayer Brown (quoting the opinion) · fetched 2026-06-04
Were Programmatic (exchange) sales investment contracts?
No. Anonymous buyers on exchanges could not know they were buying from Ripple and did not reasonably expect profits from Ripple's efforts, so programmatic sales failed Howey's expectation-of-profits prong. Institutional sales under written contract, by contrast, were unregistered securities.
Source: Mayer Brown · fetched 2026-06-04
Why it matters
Ripple created the "manner of sale matters" theory: the same token can be a security in one transaction and not in another. The SEC and other judges (see Terraform) rejected the institutional/programmatic distinction, creating the split the 2026 SEC-CFTC interpretation and the CLARITY Act try to resolve.
Mortgage relevance
Low directly, but it underlies which crypto exchanges count as "regulated" and how a borrower's tokens are classified: relevant to GSE crypto-reserve eligibility once that guidance publishes.