Jump to content
  • Sky
  • Blueberry
  • Slate
  • Blackcurrant
  • Watermelon
  • Strawberry
  • Orange
  • Banana
  • Apple
  • Emerald
  • Chocolate
  • Charcoal

Welcome to your community. We would like you to take a minute and read our newcomers guide.

Sign in to follow this  
wilslaw

Ripple sued for alledged violations of US Security Laws

Recommended Posts

A class action lawsuit has been filed against Ripple Labs, its CEO, and subsidiary. The plaintiff alleges that the state and federal securities laws have been violated by the defendants, involved in schemes to generate hundreds of millions of dollars with sales of ripple tokens (XRP) that are not registered.

 

  • Class Action Lawsuit

Ryan Coffey, a San Diego resident has filed a “securities class action” lawsuit against Ripple Labs Inc., its CEO Bradley Garlinghouse, its self-owned subsidiary XRP II LLC, and ten other related persons. Coffey’s representative Attorney James Taylor-Copeland filed the lawsuit with the Superior Court of the State of California, requesting damages on behalf of Coffey and all others involved.

According to the court document dated 3rd May, Coffey bought 650 XRP at $2.60 for each token around 6th of January and sold them around January 18 at approximately $1.70 per token. Coffey explained:

Quote

[The lawsuit] arises out of a scheme by defendants to raise hundreds of millions of dollars through the unregistered sale of XRP to retail investors in violation of the registration provisions of state and federal securities laws

 

  • XRP Genesis and the Never-Ending ICO’

Coffey gave details in his filing,

Quote

unlike cryptocurrencies such as bitcoin and ethereum…all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013.

 

 He said that 20 billion tokens were given to Ripple Labs’ founders and 80 billion to the main company, he alleges that the defendants

Quote

earned massive profits by quietly selling off this XRP to the general public. From 2013 to the present, [the] defendants have been engaged in an ongoing scheme to sell XRP to the general public in a never ending ICO…Defendants’ sales of XRP to the public accelerated rapidly in 2017 and early 2018 


Coffey alleges that the

Quote

defendants market XRP to drive demand and increase [its] price,” including “blur[ring] differences between Ripple Labs’ Enterprise Solutions and XRP.  

 

  •  Violations of Securities Laws

Giving recognition to the US Securities and Exchange Commission (SEC) has made it known that digital tokens including Ripple often constitute “securities and may not be lawfully sold without registration with the SEC or pursuant to an exemption from registration,” Coffey then explained: “The XRP offered and sold by [the] defendants have all the traditional hallmarks of a security…However, [the] defendants did not register XRP with the SEC, and many of the representations [the] defendants made regarding XRP were designed to drive demand of XRP, allowing defendants to obtain greater returns on their XRP sales”

Recently, SEC stated that both XRP and ether could be designed as securities. However, Cory Johnson, Ripple’s chief market strategist, in early April, told CNBC:

Quote

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

 

  • Like 1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×