Ripple Labs Inc is being sued for allegedly breaking state and federal laws in what plaintiff argues is a “never-ending” ICO.
Ripple Labs Inc has been implicated in a class action lawsuit in California Superior Court in San Francisco, filed May 3, 2018.
Plaintiff Ryan Coffey is seeking unspecified damages, as well as a declaration that Ripple Labs – alongside CEO Bradley Garlinghouse – sold unregistered securities to the public in “what is essentially a never-ending initial coin offering.”
“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served,” stated Ripple spokesman Tom Channick in an email to Bloomberg earlier today. “Whether or not XRP is a security is for the SEC to decide.”
Ripple Labs Inc is the creator and steward of XRP, the world’s third-largest cryptocurrency at time of press, according to CoinMarketCap.
Coffey argues that “XRP is a security” and that the defendants “themselves have recognized that XRP investors have a reasonable expectation of profit, and publicly touted XRP’s price performance on numerous occasions.”
The plaintiff reportedly purchased 650 XRP tokens in January of this year and sold them weeks later at a roughly 32 percent loss.
Last month, former CFTC chairman Gary Gensler stated, while giving a speech at MIT’s Business of Blockchain Conference, that XRP ETH could both, in fact, be “noncompliant securities.”
ETHNews will be monitoring this trial and its broader implications for securities regulation in the cryptocurrency ecosystem. The complaint in its entirety can be seen below.
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