Ripple Faces Another Class-Action Lawsuit in the US

by Arnab Shome
  • The company is already defending its stand for XRP not being a security.
Ripple Faces Another Class-Action Lawsuit in the US
Reuters

Blockchain -based Payments startup Ripple has been hit with a fresh lawsuit for violating the United States securities law by selling XRP tokens, which fall under unregistered securities.

According to a May 1 filing at a US federal district court, the fresh lawsuit was filed by Bitcoin Manipulation Abatement LLC, alleging that Ripple and its CEO Brad Garlinghouse raised more than a billion dollars through sale and marketing of XRP, thus defrauding investors.

"[...]in order to drive demand for and thereby increase profits from the sale of XRP, Defendants have made a litany of false and misleading statements regarding XRP in violation of California's securities laws, and false advertising and unfair competition laws," the court filing noted.

With this lawsuit, the plaintiff is seeking to "recover damages" and "obtain other relief."

"Defendants have since earned massive profits by selling off XRP to the general public, in numerous offerings, having sold $1.1 billion in XRP to retail customers in exchange for legal tender cryptocurrencies," the complaint added.

A mysterious company seeking profits from big players

Notably, Bitcoin Manipulation Abatement is the same company behind the $150 million class-action lawsuit against crypto derivatives exchange FTX. Then it alleged the platform for manipulating the price of Bitcoin and also dragged Binance's name. A court, however, squashed all charges.

Despite involvement with major lawsuits, very little is known about this company.

Unlike Bitcoin or Ethereum, XRP is highly centralized. The company itself controls a major portion of the digital currency, which is designed for cross-border money transfers within Ripple's ecosystem.

Meanwhile, allegations on XRP being unregistered security is now new. The San Francisco-headquartered company is facing multiple similar allegations and fighting court battles.

Blockchain -based Payments startup Ripple has been hit with a fresh lawsuit for violating the United States securities law by selling XRP tokens, which fall under unregistered securities.

According to a May 1 filing at a US federal district court, the fresh lawsuit was filed by Bitcoin Manipulation Abatement LLC, alleging that Ripple and its CEO Brad Garlinghouse raised more than a billion dollars through sale and marketing of XRP, thus defrauding investors.

"[...]in order to drive demand for and thereby increase profits from the sale of XRP, Defendants have made a litany of false and misleading statements regarding XRP in violation of California's securities laws, and false advertising and unfair competition laws," the court filing noted.

With this lawsuit, the plaintiff is seeking to "recover damages" and "obtain other relief."

"Defendants have since earned massive profits by selling off XRP to the general public, in numerous offerings, having sold $1.1 billion in XRP to retail customers in exchange for legal tender cryptocurrencies," the complaint added.

A mysterious company seeking profits from big players

Notably, Bitcoin Manipulation Abatement is the same company behind the $150 million class-action lawsuit against crypto derivatives exchange FTX. Then it alleged the platform for manipulating the price of Bitcoin and also dragged Binance's name. A court, however, squashed all charges.

Despite involvement with major lawsuits, very little is known about this company.

Unlike Bitcoin or Ethereum, XRP is highly centralized. The company itself controls a major portion of the digital currency, which is designed for cross-border money transfers within Ripple's ecosystem.

Meanwhile, allegations on XRP being unregistered security is now new. The San Francisco-headquartered company is facing multiple similar allegations and fighting court battles.

About the Author: Arnab Shome
Arnab Shome
  • 6306 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6306 Articles
  • 80 Followers

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