Investor Lawsuit Against Ripple Demands Explanation for Ongoing Public Sales without SEC Registration
XRP the third-largest cryptocurrency by market cap has had quite a disastrous year in terms of trade market price action, where it failed to break past the psychological barrier of $0.30 even when the rest of the altcoins have made significant gains. Not only that XRP has often been accused of being security as its market circulation is centralized, in the class-action lawsuit filed against Ripped, but the firm has also been accused of violating several security laws that put investors at risk.
In the ongoing XRP securities lawsuit Bradley Sostack, the lead plaintiff in the case has now double-down on his claims that, since XRP falls under Security it has broken the law by selling it's token without registering it with the Security and Exchange Department (SEC) of the United States.
The lawsuit was filed by previous investors in the company who lost a significant amount of capital due to the depreciation of XRP tokens. The investors started a quest to prove that XRP was a security back in the summer of 2018.
Ripple in response filed a motion to dismiss the case based on the three-year statute of repose that expired in 2016. But Sostack claimed that the statute of repose does not immune the firm from breaking security laws.
Sostack was appointed as the plaintiff in the case by the court in the long-running court battle started in summer 2018. Sostack claimed that he lost $118,100 through his XRP investments. He claimed that the parent company cheated people by claiming that the price of the altcoin would spike and they would receive many folds the returns.
Now Sostack has filed a new motion drawing the attention towards ongoing public sales of XRP which is in violation of the security law.
Sostack told the court that the defendant relies on “out-of-circuit decision” which “cannot be squared with the Supreme Court’s more recent holding that the statue of repose ‘runs from the defendant’s last culpable act (the securities offering).'”
“Defendants have failed to cite any case – and indeed, no court has found – that liability for multiple offerings have been barred by the statute of repose.”
Ripple must respond to the new fillings by December 4th and the oral arguments in the court are expected to commence by January 15.
SEC has banned the Telegram to offer its token to the public which was scheduled for late September as they failed to register their token sale with the SEC. Telegram raised over $1.4 billion through ICOs. Thus, whether XRP is a security or not will remain an arguable topic, but for now Ripple must explain how they were conducting public sales without the registration or license to offer.