A class-action lawsuit against San Francisco-based global payments firm Ripple now includes two additional accusations.
The lawsuit, first filed in 2018 by lead plaintiff and former XRP investor Bradley Sostack, alleges Ripple illegally sold XRP as an unregistered security, breaching US securities law. An amended complaint submitted on March 25th now claims that the company also engaged in false advertising under California law.
“Lead Plaintiff brings this sixth claim for relief for false advertising in violation of California Business and Professions Code Section 17500 under the alternative theory that XRP is not a security.
Defendants operate a business where they intended to, and did, sell XRP to members of the general public, including Lead Plaintiff. Defendants cause to be made or disseminated through California and the United States through advertising, marketing and other publications, statements that were untrue or misleading, and which were known, or which by the exercise of reasonable care should have been known to Defendants, to be untrue and misleading to consumers and Lead Plaintiff.”
The lawsuit claims that misleading advertising from Ripple includes statements regarding the genesis of XRP, the circulating supply of XRP and adoption of XRP.
A seventh claim against Ripple alleges the company violated the California Unfair Competition Law.
Recent adjustments to the lawsuit also accuse Ripple CEO Brad Garlinghouse of selling 67,000,000 XRP while publicly stating he was holding XRP for long-term gains.
Ripple says XRP is an independent asset and cannot be a security because investors are not shareholders in the company. Since Ripple’s motion to dismiss the lawsuit was denied in February, it can proceed to trial.
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