Ripple vs. SEC Heats Up: California Lawsuit Adds Fuel to XRP Price Uncertainty

Published by

Qadir AK

February 27, 2024

The year 2024 is proving challenging for Ripple, with legal troubles piling up. Following a setback with the SEC, Ripple is now in a legal tussle with California regulators.

What’s going on and why would it matter to you? Dive right in to find out!

Accusations and Denials

Ripple Labs Inc., led by CEO Brad Garlinghouse, and its subsidiary XRP II, LLC, are accused of selling XRP without proper registration, violating securities laws. Ripple denies these allegations.

The lawsuit, filed in the Northern District of California, claims Ripple broke federal and state securities laws by selling XRP without the necessary registration. The plaintiffs aim to represent two groups: the Federal Securities Claims Class and the California State Securities Claims Class, which includes those who bought XRP between July 3, 2017, and June 30, 2023.

Ripple’s Defense

In response, Ripple argues that XRP is not a security and doesn’t require registration. Despite support from senators and legislative allies, this legal battle could shape how U.S. regulators view digital assets, impacting the entire cryptocurrency market.

Critical Deadline and Impact

Affected parties have until April 5 to decide whether to opt-out and pursue separate legal actions against Ripple. This decision underscores the significant consequences for both Ripple and digital currency market stakeholders.

…And the struggle continues!

Ripple faces not only the California class action lawsuit but also a December 2020 lawsuit by the U.S. Securities and Exchange Commission (SEC), alleging Ripple conducted an unregistered $1.3 billion securities offering through XRP sales.

Recent developments, including a motion by Kraken to dismiss the SEC lawsuit, add complexity. Kraken’s motion refers to a Judge Torres ruling on programmatic sales, revealing strategies used by investors and traders to navigate regulatory scrutiny.

Navigating Uncertainties

Ripple’s extended legal battles highlight regulatory uncertainties in the cryptocurrency industry. Clear policies governing digital assets are urgently needed. As Ripple confronts these challenges, the cryptocurrency market awaits, aware of the potential impact on the future of digital currencies in the United States.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.