Ripple, CEO Garlinghouse Face Lawsuit for Alleged Sale of Securities

Published 27/02/2024, 09:39
Ripple, CEO Garlinghouse Face Lawsuit for Alleged Sale of Securities
XRP/USD
-

Coin Edition -

  • A lawsuit has been filed against Ripple, Brad Garlinghouse, and XRP II, LLC.
  • The suit claims that the defendants violated federal and California securities laws.
  • Ripple argues that XRP shouldn’t be labeled as a security.

Ripple Labs Inc., its CEO Brad Garlinghouse, and subsidiary XRP II, LLC, are confronting a class action lawsuit filed in the Northern District of California.

Notably, the lawsuit alleges that the San Francisco-based fintech company violated federal and California securities laws by offering and selling the digital asset XRP without the necessary registration.

“The lawsuit claims that persons or entities who purchased XRP during the class period (July 3, 2017 to June 30, 2023) have the right to recover (a) the consideration paid for the XRP, with interest, if they retained the XRP, less the current price of the XRP or upon tendering the XRP, or (b) damages if they sold the XRP at a loss,” said the lawsuit.

The plaintiffs contend that Ripple engaged in the unauthorized sale of XRP, bypassing registration requirements that have been mandated by both federal and state securities laws.

Additionally, the lawsuit seeks to represent two distinct classes: the Federal Securities Claims Class and the California State Securities Claims Class, including individuals and entities who purchased XRP between July 3, 2017, and June 30, 2023.

On the other hand, Ripple and the co-defendants counter these allegations, asserting that XRP is not a security and, therefore, does not require registration.

The lawsuit comes at a time when Ripple secured a partial win in the legal action taken by the United States Securities and Exchange Commission (SEC), where the judge stated that XRP was not a security when sold to retail investors. The SEC’s December 2020 lawsuit against Ripple alleges an unregistered securities offering of $1.3 billion through the sale of XRP.

Ripple’s defense strategy revolves around the argument that XRP, primarily used for global transactions, should not be classified as a security. The deadline for class action members to exclude themselves from the lawsuit is April 5, allowing individuals and institutions to pursue independent proceedings against Ripple for compensation.

The post Ripple, CEO Garlinghouse Face Lawsuit for Alleged Sale of Securities appeared first on Coin Edition.

Read more on Coin Edition

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.