Nearly a month after the SEC’s action against Ripple, the company is facing another lawsuit in Florida for the unregistered sale of XRP. Tyler Toomey, a Florida resident filed the lawsuit on Monday in the Middle District Court of Florida.
According to the official details of the lawsuit, Toomey alleged that the defendants actively concealed from investors the true nature of XRP. He added that the higher management of the company claimed on numerous occasions that XRP was not a security.
Toomey mentioned in the filing that he purchased 135 XRP in November 2020 and sold the cryptocurrency in two different transactions in December last year with a loss of nearly 50%. Toomey alleged that Ripple made billions of dollars by selling unregistered XRP tokens in the country.
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“The Defendants (Ripple) sold millions of dollars (or more) of XRP tokens, which are securities under Florida law, to Florida investors without registering the same either with federal or Florida authorities. Defendants began their unregistered and unlawful sale of XRP in 2013, despite having knowledge as early as 2012 that XRP could be considered an ‘investment contract’ under federal and, by extension, Florida law,” the official filing states.
Impact on XRP
Following the SEC’s lawsuit in December, the price of XRP dropped more than 60%. XRP recovered after Ripple’s announcement to fight the lawsuit. XRP’s uncertain regulatory status has created several problems for Ripple and its investors. In the recent filing by Toomey, the Florida resident alleged that the company still holds substantial XRP.
“Through this strategy, Ripple has raised well over a billion dollars through the sale of XRP, which has been used to fund the company’s operations, as well as substantially enriching Ripple’s executives, to the tune of $600 million. Defendants still hold substantial XRP that they can continue to monetize while creating a substantial risk to investors. As such, injunctive relief is appropriate,” Toomey mentioned in the filing.