Federal judge ordered case against Ripple be consolidated with class action led by Bradley Sostack
In early May 2020, Puerto Rican company Bitcoin Manipulation Abatement (BMA) filed a suit against Ripple and its CEO. Later, Judge Phyllis J. Hamilton of the US District Court for the Northern District of California required that the BMA’s case be consolidated with a putative class action.
BMA alleges that Ripple sold XRP as unregistered securities
According to BMA, Ripple sold XRP as unregistered securities and misled investors by engaging in false advertising.
On Thursday, Judge Phyllis J. Hamilton of the US District Court for the Northern District of California requested that the BMA case be merged with a hypothetical class action. The latter was initiated by Bradley Sostack in May 2018. Sostack also accused Ripple of selling XRP as an unregistered security, thus violating securities laws.
The judge commented:
“Relating the BMA action to this action would avoid the duplication of labor and conflicting results that might otherwise arise. Plainly, a core contention at issue in this litigation —whether XRP qualifies as a security under federal and California state law — is novel and nuanced. While the court is less concerned about potentially conflicting results, its determination of that core contention, in addition to that of the other questions presented in this action, will require significant labor.”
Following the action of the class led by Sostack, it has been around for more than two years. The plaintiffs alleged that Ripple did not register its token with the U.S. Securities and Exchange Commission (SEC), generate 100 billion XRP from nothing, and launch an initial coin offering. there is an end.
At the end of last year, Ripple wanted to eliminate the class action lawsuit. Garlinghouse’s company claims that the allegations exceed the three-year period set forth in the statute of limitations for deferral of federal securities law. Basically, the plaintiffs should have acted within three years of the XRP launch.
However, in February, Judge Hamilton let the case go forward. She asked for more details on supposedly fraudulent tokens-related complaints.
The plaintiffs responded with a revised complaint about two months ago. They say that Ripple has deliberately overstated the practical utility of XRP as an online bridging currency, for cross-border payments.
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