Is Ripple About to be Hit With Another Class Action Suit?
Another law firm is seeking XRP users interested in bringing a case against the cryptocurrency.
Following the launch of a class action lawsuit against Ripple on May 4, shareholder rights law firm Johson Fistel, LLP is reportedly “investigating potential claims against Ripple Labs.”
“Defendants have since earned massive profits by quietly selling off this XRP to the general public…in order to increase demand for XRP, and thereby increase the profits it can derive by selling XRP,” reads the suit.
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“Ripple Labs has consistently portrayed XRP as a good investment, relayed optimistic price predictions, and conflated Ripple Labs’ enterprise customers with usage of XRP.” Interested investors are encouraged to contact Johnson Fistel.
“A Never-Ending ICO”
The original class action lawsuit was brought against Ripple (XRP) by a burned investor, Ryan Coffey. Together with blockchain-specialized law firm Taylor-Copeland Law, Coffey has accused the San Francisco-based Ripple Labs of violating both state and federal securities laws.
The suit alleged that Ripple has been carrying out what a “never-ending ICO”, selling tokens that can be legally classified as unregistered securities under the California Corporations Code and the US Securities Act. The case has been brought on behalf of all entities who purchased XRP after January 1, 2013.
Here are some of the allegations in the complaint against Ripple. Mentions a blurring of the lines between Ripple’s Enterprise offerings and $XRP in an effort to pump the $XRP price. pic.twitter.com/8RLMuZT6sA
— Kyle Torpey (@kyletorpey) May 4, 2018
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Coffey reportedly bought 650 XRP tokens for roughly $2.60 each (worth ~$1690) on January 6, 2018. Twelve days later, on January 18, he traded all of his XRP for the equivalent of $1,105 in Tether dollars, marking a net loss of approximately $550.
In Spite of the Hype, Ripple Still Claims That It Is “Not a Security”
There may be some merit to the case–CCN reported that formed CFTC Commission Chairman Gary Gensler said that he would classify XRP tokens as ‘non-compliant securities’ due to Ripple’s centralized distributed model.
However, murky interpretations of the ways that financial regulations should apply to cryptocurrencies have led to some serious legal confusion within the crypto space.
What a nightmare this is. SEC says “all ICOs” its seen are sales of securities, but FinCEN says they are “generally” money transmission.
But by law, they can’t be both.
As an industry, we must do a better job of educating our governments.https://t.co/KUaX6uoehs … @coincenter
— Marco Santori (@msantoriESQ) March 6, 2018
Despite the buzz around the lawsuit, Ripple executives remain unconcerned. They have always publicly held the opinion that XRP is “absolutely not a security,” in the words of Cory Johnson, Ripple’s chief market strategist.
You just have to watch the price to see how they pump and dump it. As soon as they get traction from their paid spin doctors and media announcements, the price rises 10% or so then, scoop, they cash out a pile. Snake eyes sucking us dry.
re: price rise 10%
Ans dude xrp is around $0.80 a 10% move is $0.88; this is crypto world not equities. Big difference, 10% moves a fairly normal. Don’t believe me, watch coinmarketcap.com, on right hand column- is 7day% change, the numbers posted are easily > +/-10%. In fact you’ll coins at +45%, +60%, -26% , etc.
This smells like TUTTY!
Ryan Coffey what a baby! Oh u didn’t know the risk in investing? U claim to have lost $550 cause u sold your xrp at a loss and u only jad it for 12 days. Give me a break u know nothing about investing and the risk thats involved but I can tell u this I hold alot of xrp and I’m holding on to it cause its going to be huge@ If u just would of held on to your xrp till this summer or end of this year u would of made a pretty nice profit but instead… Read more »
These lawsuits are a joke. 1st lawsuit is over a $500 loss. Unbelievable
Isn’t this why anyone investing money is advised not to invest money they can’t afford to lose and that the value of their investment may go up or down and that they may not get back what they put in and may lose everything. Honestly if you’re putting money in any crypto, your taking a risk, and if you don’t realise this you shouldnt be playing with it. There is not reasonable expectation that the value will increase, just a speculation, however with ripple there is a rationale for believing that it might as it has an actual proven useful… Read more »