Categories: Ripple

Ripple Slapped with [Another] Suit Alleging XRP is a Security

Click here to view original web page at www.ccn.com
Advertisement

Yet another securities fraud lawsuit has been filed against Ripple in California. In the latest suit, the lead plaintiff, David Oconer, is seeking to have the XRP cryptocurrency classified as a security.

The case was filed in California’s Superior Court sitting in San Mateo County and has named Ripple Labs, its chief executive officer, Brad Garlinghouse, and XRP II LLC, a money service business unit of Ripple Labs, as defendants.

According to the lawsuit, the way XRP cryptocurrency is managed and distributed by Ripple Labs as well as how the coin is conflated with the company’s product offerings makes XRP a security. Consequently, the suit claims that the firm has thus violated securities laws by selling it.

Start your free trial today.
Ad
Squarespace powers millions of
websites across hundreds of industries.
Squarespace
Learn more

Ripple Labs is also alleged to have promoted the XRP cryptocurrency in a bid to increase its value. One of the ways employed by Ripple to achieve this was to limit distribution.

Lawsuit Claims Ripple is Pumping the XRP Price

Per the suit, last year in May the company disclosed that the distribution of 61.68 billion XRP that Ripple owned would be limited, with the firm placing 55 billion XRP in an escrow account. According to the lawsuit, executives at Ripple, including the CEO, were active in promoting this fact with a view of driving the price up.

Boom! 55B $XRP now in escrow. Good for supply predictability and trusted, healthy $XRP markets. Glad to finally let this #cryptokitty out of the bag!https://t.co/TpOTuwwwdd

— Brad Garlinghouse (@bgarlinghouse) December 8, 2017

The lawsuit goes further to state that, by limiting supply, the intended effect was achieved.

“Ripple’s public commitment to limit the supply of XRP had its intended effect. In the weeks that followed, the price of XRP rapidly increased, from approximately $0.22 per token on December 7, 2017 to $3.38 per token on January 7, 2018,” the complaint reads.

This is the third class-action lawsuit that Ripple is facing, as CCN has previously reported. Last month a suit was filed by Vladi Zakinov, also in California’s Superior Court in San Mateo County, alleging that XRP is a security under the control of Ripple Labs.

According to Zakinov, Ripple should have registered XRP prior to selling it, though this never happened. Additionally, the lawsuit alleged that improper statements were made by the company and its executives and this had the effect of raising XRP’s price.

‘Never-ending Initial Coin Offering’

Ripple CEO Brad Garlinghouse has consistently maintained that XRP is not a security, but critics say that it is. | Source: Wikimedia / Christopher Michel

And in May there was another class action lawsuit against Ripple in which the same allegations of violating securities regulations were put forward. According to Ryan Coffey, the lead plaintiff in the particular suit, Ripple Labs and other defendants had profited massively by engaging in a “never-ending initial coin offering.” The lawsuit also accused Ripple Labs of portraying the XRP cryptocurrency as a good investment, as well as relaying optimistic price predictions.

The company’s defense team is comprised of Jo White, a former chair of the Securities and Exchange Commission, and Andrew Ceresney, a former enforcement chief at the same regulatory body.

Still in a Gray Area

Ripple has consistently refuted the argument that XRP is a security. In April the chief market strategist of Ripple, Cory Johnson, said in a television interview reported by CCN:

“We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.”

Last month, a director of the Corporation Finance Division of the SEC, William Hinman, indicated that the body did not consider Ethereum to be a security. However, he made no mention of Ripple. At the time, a spokesperson for Ripple said they looked forward to getting a similar confirmation from the SEC.

Featured Image from Shutterstock

Follow us on Telegram or subscribe to our newsletter here.

Join CCN's crypto community for $9.99 per month, click here.
Want exclusive analysis and crypto insights from Hacked.com? Click here.
Open Positions at CCN: Full Time and Part Time Journalists Wanted.

cinerama

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...
Share
Published by
cinerama

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