Ripple Labs has been hit with yet another class-action lawsuit with the allegation of violating the Florida Securities and Investor Protection Act
As the SEC lawsuit has not cooled yet, Ripple Labs is again attacked by another class-action lawsuit, filed on behalf of Florida-based buyer Tyler Toomey.
Ripple’s legal troubles keep piling up with yet another class-action lawsuit being filed against it
The plaintiff accuses the blockchain company of violating the Florida Securities and Investor Protection Act by offering XRP to retail investors without imposing any restrictions.
Ripple’s inability to afford its corporate business expenses allegedly compelled it to sell the token “as widely as possible” while controlling its supply and liquidity:
“In other words, the overwhelming majority of Ripple’s revenue came from its sales of XRP (over $1 billion), and Ripple relied on those sales to fund its operations.”
The lawsuit also names Ripple CEO Brad Garlinghouse as an individual defendant, asserting that he sold about $150 million worth of XRP from April 2017 through December 2019 while manipulating the token’s performance:
“At various times between April 2017 and at least December 2019, Garlinghouse also paused his XRP sales because XRP’s market price was falling, seeking to avoid driving down XRP’s market price.”
Garlinghouse made a fortune with his persistent sales despite saying that he was long on XRP on CNBC and predicted that its market cap could potentially reach “trillions of dollars” in a Bloomberg interview:
“Garlinghouse himself was a particularly persistent spokesperson for Ripple’s efforts to market XRP as an investment from which investors could potentially profit. While he was selling millions of XRP, Garlinghouse frequently told investors that he was invested in XRP and that he was bullish on the investment.”
Ripple Labs was slapped with a similar class-action lawsuit filed by lead plaintiff Bradley Sostack back in May 2018. The case has been dragging on for almost three years. The legal troubles of the blockchain decacorn became much worse after it got sued by the U.S. Securities and Exchange Commission (SEC) back in December.
On top of that, Ripple was also taken to court by major asset manager Tetragon that is now seeking to redeem its equity in the company after leading its Series C funding round back in December 2019.
Ripple CEO Brad Garlinghouse revealed the firm signed 15 new customers after the SEC complaint
Ripple CEO Brad Garlinghouse revealed on social media the firm “signed 15 new customers after the SEC complaint. The firm is now seeing more customers than ever before.
Increasing demand for digital financial services and payments interoperability, Garlinghouse said, propelled the adoption of RippleNet, helping the number of deals signed last year go up 80% year-over-year, with transactions growing 1,700%.
Ripple has also kept on building on the XRP Ledger (XRPL) along with the XRP community through RippleX. Per the firm developers choose to build on XRPL for its performance, low cost, reliability and security, accessibility, and inherently green attributes.
Garlinghouse added that last year the XRP Ledger became the first major blockchain globally to decarbonize in partnership with the Energy Web Foundation.
“Today, RippleX reaches 12 million users through XRPL and Interledger Protocol, and partners with more than 40 companies championing XRP utility including Coil, Forte, BRD, Bitpay, and Flare. We will continue engaging the 100+ projects currently using XRPL by inspiring developers with best-in-class applications and functionalities.”
The firm has also added staff throughout the year, including “top talent” to its leadership team with backgrounds from companies like Apple, PayPal, Amazon, Tesla, and Twitter. As CryptoGlobe reported, TechCrunch founder Michael Arrington has recently questioned the SEC’s decision to sue Ripple.
While most crypto platforms decided to delist XRP shortly after the lawsuit was announced some sided with Ripple on the lawsuit, arguing that the SEC’s move hurt XRP investors. Crypto exchange Uphold pointed out that the SEC’s goal is to protect consumers, and believes it’s hard to see how a judgment rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors would square with that goal.
Ripple itself has argued the lawsuit already affected countless innocent XRP retail holders with no connection to Ripple. It added it muddied the waters for exchanges, market makers, and traders.
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