Ripple is facing another class action lawsuit accusing the firm of selling retail investors an unregistered security in the form of XRP.
The firm’s latest legal battle was filed in Florida by resident Tyler Toomey.
Toomey’s suit states that the sale of XRP constitutes an “investment contract” under Florida security laws, and that Ripple and its CEO Brad Garlinghouse knowingly violated those laws.
“Defendants continued to sell unregistered XRP to consumers from 2013 through the present… Defendants still hold substantial XRP that they can continue to monetize, while creating substantial risk to investors. As such, injunctive relief is appropriate.”
Back in 2018, California resident Bradley Sostack filed a separate but similar class action suit, and in late December of last year, the U.S. Security and Exchange Commission’s (SEC) filed a suit of its own alleging Ripple sold millions of dollars worth of XRP to fund its operations without registering the digital asset as a security.
Ripple and Garlinghouse have publicly responded to Sostack’s class action suit, calling the plaintiff’s accusations “outrageous.”
“My view of this is it’s pretty outrageous. Here’s somebody who held XRP for, I think, two weeks’ time and is making some claims. Whether or not XRP is a security is not going to be dictated by one lawsuit… I think it’s very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple the company shut down tomorrow, the XRP ecosystem would continue to exist. It’s independent, open-source technology.”
Ripple attempted to have Sostack’s suit dismissed in September to no avail and oral arguments for the case began earlier this month.
The firm says it will release an official response to the SEC’s lawsuit in the near future.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Billion Photos