Ripple is facing another class action lawsuit accusing the company of selling an unregistered security in the form of XRP to retail investors.
The company’s most recent litigation was filed in Florida by Tyler-based Tyler Toomey.
Toomey’s lawsuit states that the sale of XRP constitutes an “investment contract” within the meaning of Florida security laws and that Ripple and its CEO Brad Garlinghouse knowingly violated those laws.
“Defendants continued to sell unregistered XRP to consumers from 2013 until today. Defendants still hold sizable XRP to continue monetizing while creating significant risk for investors. Forbearance claims are therefore appropriate. “
Back in 2018, California-based Bradley Sostack filed a separate but similar class action lawsuit, and in late December last year, the U.S. Security and Securities and Exchange Commission (SEC) filed its own lawsuit alleging Ripple had XRP worth Sells million dollars financing its business without registering the digital asset as a security.
Ripple and Garlinghouse have publicly responded to Sostack’s class action lawsuit, calling the plaintiff’s allegations “outrageous”.
“It’s pretty outrageous in my opinion. Here’s someone who has held XRP for two weeks and is making some claims. Whether or not XRP is a security is not determined by a lawsuit. I think it’s very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple closed the company tomorrow, the XRP ecosystem would continue to exist. It is an independent open source technology. “
Ripple tried unsuccessfully to dismiss Sostack’s lawsuit in September, and verbal arguments began earlier this month.
The company announces that it will release an official response to the SEC’s lawsuit in the near future.
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