XRP spent five years being described as the token in an ongoing lawsuit. That description stopped being true in August 2025, and a surprising amount of writing about the asset has not caught up.
The case finished with a final judgment that left a 125 million dollar penalty and an injunction standing against Ripple, while confirming that ordinary exchange trading of XRP was not a securities distribution. Both halves of that sentence matter, and collapsing them into "XRP is not a security" loses the part that still carries legal weight.
XRP is the native asset of the XRP Ledger, an open-source public blockchain. Ripple is a private company that builds payment products, some of which use that ledger. The ledger predates the company's involvement, and it continues to run on a validator network that Ripple does not control outright.
The confusion persists because Ripple was for years the largest holder of XRP and the loudest voice talking about it. Large holder and large influence are not the same as ownership of the network.
David Schwartz, Jed McCaleb and Arthur Britto built the ledger in 2012. All 100 billion XRP were created at genesis, so there is no mining and no new issuance.
Instead of proof of work, the network runs the XRP Ledger Consensus Protocol. Validators agree on transaction order and validity, and each participant chooses which validators to trust through a Unique Node List. Transactions settle in roughly three to five seconds, and the transaction fee is destroyed rather than paid to anyone, which slowly reduces supply.
The ledger also carries a built-in decentralised exchange and native token issuance, so assets other than XRP can be issued and traded without a smart contract layer. That functionality predates most of the decentralised finance tooling on other chains, even though the ecosystem built on top of it has stayed smaller.
Smaller is the honest word.
The design trades some decentralisation for speed. Anyone can run a validator, but the network's practical reliability rests on a relatively small set of known operators, which is a genuine difference from permissionless mining rather than a marketing slogan either way.
The Securities and Exchange Commission filed suit on 22 December 2020 against Ripple Labs and two executives, Bradley Garlinghouse and Christian Larsen, in the Southern District of New York under case number 1:20-cv-10832.
On 13 July 2023 Judge Analisa Torres issued a split summary judgment. Programmatic sales on exchanges, executed through blind bid and ask systems where buyers did not know the counterparty, were not investment contracts. Sales of roughly 728.9 million dollars worth of XRP to institutional buyers under written contracts were unregistered offerings. She also wrote that XRP as a token was not in and of itself an investment contract.
The claims against the two executives were dropped in October 2023.
On 7 August 2024 the court imposed a civil penalty of 125,035,150 dollars and an injunction against future violations of the registration provisions, far below the roughly two billion dollars the agency had sought.
Then the settlement attempt failed. On 8 May 2025 the Commission announced an agreement that would have returned over 75 million dollars held in escrow to Ripple and vacated the injunction, and Commissioner Caroline Crenshaw dissented in unusually strong terms. In June 2025 Judge Torres rejected the joint request, and on 7 August 2025 both sides filed a joint stipulation dismissing their appeals.
That is the end of it. Litigation Release 26369 confirms the final judgment remains in effect.
The surviving rule is transaction-based, not asset-based. Direct institutional placements by Ripple were investment contracts and remain subject to the injunction. Secondary trading on public exchanges was not, because the record did not show that those buyers reasonably expected profits from Ripple's efforts.
So the honest answer to "is XRP a security" is that the question is malformed. The 2023 order answers it separately for each channel of distribution, and no court has ruled on every hypothetical future sale.
The injunction is narrower than headlines suggest. It bars Ripple from future unregistered institutional sales in the pattern the court examined, and it does not restrict what a holder does with XRP already in circulation. An investor who bought on an exchange in 2026 is in a different legal position from a fund that signed a purchase agreement with Ripple in 2019.
Ripple paid the penalty, remains bound by the injunction, and is reported to have spent around 150 million dollars on its defence.
For a retail buyer on a public exchange, the case closed in the least dramatic way possible. The activity the court declined to treat as a securities distribution is the activity such a buyer performs. The injunction binds Ripple's own institutional sales, not your order.
Two caveats follow. The ruling is a district court decision in one circuit, not a statute, and other jurisdictions draw their own lines. And the injunction means a future change in how Ripple sells XRP directly could raise fresh legal questions that do not touch secondary holders.
Check availability in your own country before assuming anything. Listings differ, and several exchanges delisted XRP during the litigation and restored it later.
Ripple placed 55 billion XRP into a cryptographic escrow that releases a fixed amount each month, with unused portions returned. The mechanism was designed to make supply releases predictable, and the ledger records them publicly.
Wallets are not free. An XRP account needs a base reserve, currently 10 XRP, plus a smaller owner reserve for each object it adds to the ledger, such as a trust line or an open order. Both figures are set by network amendment and have changed before, so confirm the current numbers on the developer documentation rather than trusting any figure quoted here or anywhere else.
The first is the destination tag. Exchanges use a shared wallet address and identify customers by a numeric tag, so sending to an exchange without the correct tag can strand the funds in a recovery process that may take weeks or fail outright.
The second is custody. Leaving a balance on an exchange is convenient and exposes you to that exchange's solvency and security, which is the same lesson every cycle teaches again. A hardware wallet holding your own keys removes that counterparty.
Check the address twice. Transactions are irreversible.
None of those four takes more than a few minutes, and together they replace almost every secondary article on the subject.
XRP is a volatile asset whose legal treatment was settled by one district court ruling rather than by legislation. Regulatory positions can shift, exchange listings can change, and the escrow releases add supply on a known schedule. Price history does not constrain any of it.
Nothing here is investment advice. Verify the facts against the primary sources listed above, and size any position to an amount you could lose without it changing your life.