In a long-standing lawsuit in which Ripple was dragged to court over it’s underlying crypto asset, XRP not being a token but security, the District Judge in California overruled Ripple’s appeal to dismiss the case.
A federal judge in Oakland, California, on Wednesday somewhat narrowed the claims against Ripple but left largely intact a complaint by investors accusing the company of selling unregistered securities.
Wednesday’s ruling comes amid concern that regulators will find XRP to be unregistered security, and potentially stop its trading. The U.S. Securities and Exchange Commission hasn’t taken a position on whether XRP is a security.
The Case File Since 2018
The law firm Taylor-Copeland( plaintiffs) filed the original case which began early in 2018. According to the plaintiff, the then payment startup, Ripple, its subsidiary XRP II, and individual CEO Brad Garlinghouse violate the US securities laws on the grounds of Ripple’s sale of native XRP token.
In August 2019, a consolidated class-action lawsuit was filed by Vladi Zakinov’s with Bradley Sostack identified as the lead plaintiff. Their counsel is James Taylor-Copeland and Oleg Elkhunovhich.
Ripple Fails At Appeal
According to earlier reports, Ripple Network (the defendant) tried to persuade the court to dismiss the case on the grounds of the status of limitation relating to the time of the lawsuit. However, yesterday, the court ruled that the security claims in question are not invalidated under federal law.
The defendants of the case are Ripple Inc, XRP II Subsidiary and the CEO of Ripple, Brad Garlinghouse. However, the defendant team consists of their counsel team which include Damien Marshall, Kathleen Hartnett, and Menno Goedm
Is XRP Security Or Not?
U.S. District Judge Phyllis Hamilton rejected Ripple’s request to toss out claims that it violated federal securities law. Hamilton dismissed certain claims that Ripple made false statements under California law. But she gave investors another shot at pursuing those claims in an amended complaint.
At the moment, the plaintiffs are showing more potential to come out victorious. According to a list of claims against the defendant, XRP investors have been misleading about the nature of the top cryptocurrency.
Cryptocurrency analyst, Jake Chervinsky tweeted about the situation recently. According to the popular crypto analyst,
“There’s a lot going on here, but overall it’s a victory for the plaintiffs. The securities claims survive. XRP stays in the crosshairs.”