More Litigation Filed Against Ripple and its CEO

Following the US SEC’s lawsuit, a second class-action claim is instituted against Ripple and its CEO. The second lawsuit also claims Ripple’s XRP to be “securities” and not “cryptocurrency”. US$ 1.38 Billion has been claimed as damages by the State of Florida.

On 25th January (Monday), 2021 a second class-action claim has been lodged against Ripple and its higher officials including Brad Garlinghouse, CEO. The suit has been filed in the District Court of Florida by one, Tyler Toomey. The plaintiff has claimed that Ripple intentionally sold unregistered assets to the consumers of Florida in violation of the State’s securities law.

This is another suit filed against Ripple and its executives in the US claiming its native coin, XRP, as securities. The earlier suit was filed by the Securities & Exchange Commission of the US in which the claimant challenged the status of XRP. In the instant lawsuit, the plaintiff has asked the Court to allow damages to the tune of US$ 1.38 Billion. The suit alleged that XRP is “securities” rather than “cryptocurrency” and therefore required registration and approval before its sale.

XRP was launched 7 years ago in 2013 but did not seek approval from the Federal Authorities nor from the State of Florida. Instead, Ripple considered its native coin to be “cryptocurrency” started selling them to US customers including those from Florida as well. However, a dispute arose between Ripple and SEC which is currently pending before another US Court. As a result of the lawsuit, various US-based crypto exchange platforms suspended their XRP trading. This seriously affected the value of XRP and now the investors are reluctant to put their money into XRP.

Meanwhile, the case of Ripple is that XRP isn’t securities nor it can be classified as securities under the US’s securities laws. The company also argued that in other countries except for the US, XRP has been treated as a “cryptocurrency” like Bitcoin or Ethereum. However, nowhere else in the world XRP is classified as securities, stressed Ripple.

The plaintiff has claimed in the suit that he had purchased a total of 135 Ripple’s coins in November for about US$ 100. However, the purchaser was forced to sell his XRP at loss because SEC found it to be securities. Toomey said that he was made to suffer a loss to the tune of US$ $ 50 at no fault of his own.

On the other hand, Ripple’s counsel has claimed that the present suit is filed for mala-fide intention. He claimed that Toomey is being used as a scapegoat because he has filed the suit on someone else’s behalf. The counsel indirectly accused SEC for using Toomey as plaintiff. Toomey has further claimed the costs of litigation as well as monetary compensation against Ripple.

The lawsuit has been admitted for hearing and the first hearing will be fixed by the Court.