Ripple and CEO Brad Garlinghouse face new lawsuit
Ripple Labs Inc. and its CEO Brad Garlinghouse have been served with another lawsuit, according to court documents signed last week. This is the third lawsuit that has ended up at the Blockchain company’s doorstep this year. Earlier in June, the Ripple had landed in legal deep waters after a class action suit was filed against it. The lawsuit claimed that XRP, the company’s native digital tokens, were securities.
According to TNW, the new lawsuit against the crypto company and Brad Garlinghouse was filed on June 27th by a private XRP investor. It alleges that the company and its CEO have “promoted, sold and solicited the sale of XRP.” The lawsuit claims that Garlinghouse and Ripple Labs Inc. combined the token with the trademarked Ripple technology. Moreover, it claims that they have illegally benefited from the increase in price the entire time.
See Also: Ripple (XRP) tokens are securities: New California Class Action suit filed against Ripple Labs
The legal documents especially point out the company’s move which placed 55 billion XRP tokens in escrow. This, the company claimed, was to ‘ensure certainty of total supply’. They meant to reassure their investors that they wouldn’t abuse the majority control of the total circulation with sudden, large sell-offs. But according to these lawsuits it’s seen as the company was selling tokens slowly and quietly. Moreover, it notes that, following the announcement of the escrow, XRP’s price shot up over 1000%.
All three lawsuits against the Blockchain company allege that the centralized and mining-free distribution model of XRP allowed for a continuous ICO. And it alleges that during this period, Ripple Labs Inc. sold close to $100 million worth XRP to fund themselves. This, according to the lawsuits, was just in 2017’s last quarter.
All these lawsuits seem to be following the same narrative, that XRP is a security. They also aim to shed some light on their consistent self-funding, which does seem mysterious. But, several executives from Ripple including the CEO have spoken in the past about why XRP is not a security. The entire confusion seems to be stemming from the fact that a large amount of XRP is still under the control of Ripple Labs.
While it hasn’t been cleared by the SEC if XRP is actually a security or not, there are very little chances of it ever being declared one. So it doesn’t really matter if these lawsuits come along, but it presents an opportunity for investors to buy XRP. And all these lawsuits and debates regarding the status of XRP as a security might even hasten the SEC into making a decision. And a positive decision from the SEC will definitely push the cryptocurrency to the moon.
Social Media Response (Reddit)
- AltMoonMan:All of these lawsuits will be thrown out the moment SEC declares its not a security. If anything, these court summonings will give execs and their lawyers a chance to further clarify it in front of a judge. This is actually good if you ask me
- Le_WiredShut:Ya many will be thrown out. But to go to such lengths. It’s either hatred…or their onto something. Either way like you say if it’s thrown out that’s positive news.for ripple
Image via NewsBTC
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