Another Lawsuit Claims XRP Cryptocurrency is a Security
June 9, 2018 11:35 am
Ripple has been named in Another Lawsuit tied to XRP Digital Currency
On Tuesday, investor Mr. Vladi Zakinov filed a class action lawsuit, naming Ripple Labs, XRP II the firm’s licensed money services business. CEO Mr. Brad Garlinghouse and 25 unidentified people as defendants. The complaint was submitted to the Superior Court of California in the county of San Mateo.
Mr. Vladi Zakinov’s claims focus around the assertion that XRP token is security regulated by Ripple. The lawsuit says that Vladi Zakinov purchased XRP in January 2018 and “was damaged thereby.”
He asserted in the complaint:
“XRP, despite its name as a ‘token,’ is indeed security under California law. In particular: (i) Ripple uses the funds it raised from the sale of XRP to fund its business ventures; (ii) the Company indiscriminately offers XRP for sale to the public at large; (iii) plaintiff and the Class (as defined herein) are effectively powerless to control the success of Ripple and XRP; and (iv) plaintiff and the Class members’ investment is mostly at risk and is without any security.”
The filing went on to say that Ripple and the other named defendants “were required to register XRP when offering or selling it,” however they did not. Moreover, the suit alleges, the defendants “made a series of improper statements which drove up the price of XRP,” which helped Ripple receive greater returns from selling the token.
Although the lawsuit continues, the investors lost money and have the potential to keep losing money as XRP owner can’t control Ripple.
A representative for Ripple firmly pushed back against the lawsuit’s claims when reached.
“This is just another instance of an extortionist bringing forth an opportunistic lawsuit that lacks merit. We feel confident that the allegations regarding XRP are completely unfounded both in law and fact,” the spokesperson stated. A request for comment sent to Vladi Zakinov’s attorneys was not immediately returned.