Judge Analisa Torres ruled that Ripple’s sale of XRP to the general public and its distributions of the token do not constitute an offer and sale of an investment contract.

These include “Programmatic sales,” where XRP was offered to public buyers, and “Other Distributions,” where people were given XRP for free.

The court concluded that the former does not satisfy the third prong of the Howey Test, as the public buyers could not have been aware of the various statements and marketing campaigns linking the token’s price performance to the company’s performance.

Meanwhile, the latter fails the Howey test as the receivers never put up any investment for the asset.

However, the court concluded that all XRP sales offered to institutional buyers did constitute an offer and sale of an investment contract as those buyers were “sophisticated” enough to understand the connection between XRP’s price and the company’s performance.

Furthermore, Ripple directly marketed and promoted the token to institutional buyers, and they had a reasonable expectation of profiting from their investments.

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