XRP Lawsuit: Ripple Is Forced To Respond By September – Is XRP A Security?
The San Francisco-based company managed to achieve a lot of important partnership, while at the same time, boosting their products. It also made sure to support the entire XRP ecosystem.
Now, XRP and Ripple are in the spotlight and not for the best reasons.
Ripple, accused of selling XRP as un unregistered security
According to the latest reports, there’s a group of investors who have just filed an amendment to their lawsuit against Ripple and this accuses the company of selling XRP as an unregistered security.
This new filing is the very first one since Ripple had to fight four cases against it. The company has to file a response until September 19th.
The Daily Hodl notes that according to the modified 11-page complaint, XRP is a security because the token’s purchasers “made an investment of money in a common enterprise.”
More than that, according to the same filing, XRP investors “had a reasonable expectation of profits,” and that “the success of XRP requires efforts of Ripple and others.”
XRP a security?
The complaint also claims that XRP is qualified as a security under both federal and California state law.
According to the same online magazine, in California, the suit alleges that Ripple has violated the state’s false advertising and unfair competition laws.
It’s claimed that Ripple did this by making misleading statements about the “genesis of XRP, the circulating supply of XRP, and adoption of XRP.”
The lawsuit also alleges that Ripple executives issued statements that seemed to have suggested that XRP could be a security.
According to the Daily Hodl, CEO Brad Garlinghouse mentioned during an interview with CNBC in 2017 that “people are looking at the success Ripple has been having as a company, and I think that’s increased the value of XRP.”
Ripple CEO and more important names at the company addressed the issue of whether XRP is a security or not a lot of times so far, denying these claims.
Garlinghouse is both the CEO and Chairman of Ripple Labs. This year, Ripple surpassed 300 partners, including over 115 banks worldwide. Having launched On-Demand Liquidity (ODL) for cross-border payments, Ripple now has more than 20 partners using XRP for ODL, including Moneygram, Western Union, and American Express.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.