The Taylor-Copeland law firm has filed a class action lawsuit against Ripple on May 3rd. The official complaint of lawsuit targeted Ripple, XRP II, Brad Garlinghouse Ripple CEO. Thus, claiming that company debased laws by offering unregistered securities.
On 3rd May, the fintech startup, Ripple Labs Inc., which holds as world’s 3rd largest cryptocurrency was hit by a class action lawsuit. Since, claiming that it led to raise funds through unregistered XRP tokens sales.
According to the official complaint, the accuser, Ryan Coffey on Jan 5th , 2018 purchased 650 XRP and sold it for USDT on 18th Jan. Meanwhile, he then exchanged it for USD and suffered a loss around 32 percent: $551.89.
However, Coffey was not expecting to lose money on his investment due to ripple labs promotional practices. Likewise, it means posting or retweeting articles about Ripple (XRP) is more favorable.
“XRP purchasers reasonably expected to derive profits from their ownership of XRP, and Defendants themselves have frequently highlighted this profit motive […] Given its reliance on sales of XRP, it is unsurprising that Ripple Labs aggressively markets XRP to drive demand, increase XRP’s price, and thus its own profits”.
Moreover, the class action suits allege that the firm has violated both the Securities Act and the California Corporations Code. The accusers are now requesting court to declare the sale of XRP an unregistered securities sale. Thus, to prevent the defendants from further securities laws.
The Spokesperson for Ripple, Tom Channick told that,
“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been serving. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time. Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security”.
Noticeably, in July the US Securities and Exchange Commission stated that companies that raise fund through the sale of digital assets should follow federal security laws.
Additionally, action class lawsuit against Ripple also highlighted that it trying to persuade few US crypto exchanges to list XRP.