There seems to be more trouble in the Ripple Labs suit. In fact, after the California District Court ruling, we can see a significant increase in collective lawsuits across the entire cryptocurrency space.
Ripple Labs may face more lawsuits
Since the SEC began controlling ICOs because it is an illegal securities service, most cryptocurrency companies have tried to justify that their token is not a security.
However, as a California district court has just pointed out in a lawsuit against Ripple Labs, the fact that tokens are not securities, on the contrary, bring more impact.
If cryptocurrencies like XRP are not securities, state and federal laws against unfair, deceptive, or abusive acts (UDAAP) may apply. This includes California’s unjust competition law.
To date, tokens are still classified as securities, mainly leading to out-of-court penalties with some exceptions. Notably, the lawsuit between SEC and Telegram is still ongoing. However, if UDAAP rules apply, the situation will be different.
Not just the SEC, any individual can bring a case against a company for unfair or deceptive acts. They can also act on behalf of the entire customer of a company, negatively affecting business.
These types of lawsuits can cover everything from the fine print on marketing materials to hidden fees charged by financial institutions.
Read more:
- Ripple Joins Forces With Rippleworks, The Non-Profit Organization That Was Founded By Chris Larsen
- Ripple CTO David Schwartz: Stablecoins Should Be Created On XRP Ledger