The U.S. District Court for the Northern District of California has ruled to dismiss two fraud allegations against Ripple
Based on a court record dated October 2nd, 2020, and signed by judge Phyllis J. Hamilton, it looks like the U.S. District Court for the Northern District of California has decided to dismiss the charges against Ripple for violation of sections 17500 and 17200 of the California Business and Professions Code.
Two fraud allegations against Ripple dropped as XRP lawsuit moves forward
The US Northern District Court of California ruled over two fraud charges against Ripple. However, they continued their lawsuit regarding Ripple’s violation of the California Corporate Code. The three fraud allegations are part of Ripple’s class-action lawsuit first filed by investor Vladi Zakinov in November 2018.
According to the court documents, the plaintiff argued that:
“Garlinghouse made statements that conflated the adoption of enterprise solutions with the adoption of XRP even if Ripple’s enterprise clients were not adopting the fourth-largest cryptocurrency.”
“In the tweet, Ripple stated that ‘#XRP – up 4,000% this year – has shown the market favors a real use case for #digitalassets . . .’ Id. In the interview clip, Garlinghouse stated that ‘digital assets are in a position to be more valuable than gold’ and described XRP as ‘solving a real-world use case, it’s not just about speculators.”
The court granted the motion to drop the charge, saying the plaintiff’s claim is unfounded.
A separate complaint alleges that Garlinghouse made false statements:
“Garlinghouse stated that ‘[p]eople are looking at the success Ripple has been having as a company, and I think that’s increased the value of XRP.’ Id. Garlinghouse further stated that Ripple wanted ‘to keep focusing on making XRP a valuable payments tool, and that value will increase accordingly’ and that he was voting with his . . . pocketbook on the future increased value of cryptocurrencies.”
The court also dismissed the lawsuit on the grounds of lack of merit.
However, the court gives the plaintiff the green light to proceed with the cause of action involving the violation of the California Corporations Code 25401 against Garlinghouse.
In a December 2017 interview, Ripple’s head said he personally invested in XRP:
“I’m long XRP, I’m very, very long XRP as a percentage of my personal balance sheet. . . . . [I am] not long on some of the other [digital] assets, because it is not clear to me what’s the real utility, what problem are they really solving . . . if you’re solving a real problem, if it’s a scaled problem, then I think you have a huge opportunity to continue to grow that. We have been really fortunate obviously, I remain very, very, very long XRP, there is an expression in the industry HODL, instead of hold, it’s HODL . . . I’m on the HODL side.”
Judge Hamilton said the plaintiff might move forward with the cause of action solely based on Garlinghouse’s alleged misrepresentation regarding the scope and character of his XRP holdings.
The court also noted that the plaintiff might pursue the other causes of action against Ripple Labs:
“As previously decided by the court in its prior order, the plaintiff may, of course, also proceed on his remaining first, second, third, and fifth causes of action against defendants for their alleged sale or offer of unregistered securities in violation of federal and California state law.”
- XRP Price Is Likely To Accelerate Lower Towards $0.22 If It Breaks The $0.228 Support
- A New Job Opening At Ripple Confirms It’s Preparing To Launch A Next-Generation Trading Platform