Categories: Ripple

Ripple Labs Sees Third XRP Cryptocurrency Securities Fraud Lawsuit

Click here to view original web page at

An investor in Ripple Labs’ XRP Cryptocurrency filed a lawsuit in California against the platform under California’s Corporate code. The lawsuit was for securities fraud and it is the third one within a span of two weeks. The two prior suits were filed in the same counted and one of them has been removed to federal court in the Northern District of California.

All three lawsuits have named Ripple’s subsidiary XRP II LLC and its CEO Bardley Garlinghouse as defendants. Further, the complaints allege that due to the centralized method for management and distribution of XRP and the way the platform conflates the cryptocurrency with its own product offerings, XRP should be classified as a security and accordingly, the platform violated securities laws.

One of the lawsuits, which is a class action, features a complaint that provides in-depth explanations as to how the platform allegedly influences XRP to increase prices. This is significant, because the complaint may show that the Howey Test for the definition of as security has been met. The test was identified in SEC v. Howey.

The complaint also alleges that the platform’s actions were performed to “drive price appreciation” and to “maximize profits from XRP sales.” It was also determined that XRP’s prices increased over 1,000 percent.

Additionally, XRP is managed in a manner that is different from other cryptocurrencies. For instance, while Ether and bitcoin are mined on a blockchain by individual users to become actualized property, XRP has 100 million units in existence, 61 million of them which are owned by Ripple Labs.

Counsel for Ripple Labs has successfully petitioned the court to dismiss the allegations of fraud, arguing that only the U.S Securities and Exchange Commission can decide whether XRP is a security and the XRP is solely a cryptocurrency. Ripple’s chief cryptographer argued that XRP cannot be as security because Treasury’s Financial Crimes Enforcement Network stated that CRP is a cryptocurrency and approved its sale.

Even with the above circumstances, there is still a question as to whether a previous settlement impacts present case. According to a partner at Loeb and Loeb,

“A contrary finding by a court of the SEC would arguably contradict the FinCen determination, and no one could also surmise the SEC would not be quick [to contradict FinCen]. But that is all speculation.”

If the court or regulators do determine that XRP a cryptocurrency and is subject to federal securities law, the consequences could set precedent in California. XRP would need to stop trading and individual owners of the currency will be granted the right of recession, so Ripple would have to refund initial purchases.


Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Published by

Recent Posts

Bitcoin Is Up Against An Extremely Important And Powerful Resistance Zone On The Monthly Chart: The Kijun-Sen (Base Line)

We can identify the price action causes of why price is finding it difficult to move higher by analyzing longer… Read More

5 hours ago

BTC ATM goes missing and no one notices

When you think of thieves stealing an ATM, the mind jumps to the idea of an exciting crime. Maybe there’s… Read More

5 hours ago

Major Swedish Bank Orders Negative Interest Rate on Euro Deposits

Sub-zero interest rates have become the norm in some countries, especially in Europe. Nordic nations such as Sweden and Denmark… Read More

5 hours ago

Researchers Concur Current Bitcoin Market Cycle is Only Just Beginning

Bitcoin price cycles can be influenced by a number of factors, FOMO and public sentiment is one, and mining profitability… Read More

5 hours ago

Hopes for Bitcoin as China’s Renminbi Drops to 11-Year Low

A recent plunge in the bitcoin price is looking to negate some of its losses as China’s currency weakens to… Read More

5 hours ago

Why Bitcoin Rules in the ‘Insane’ World of Negative Interest Rates

Central banks around the world are on a negative rate binge to further a compelling case for bitcoin.. | Source:… Read More

5 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More