Latest Changes To Ripple Class Action Suit Gives ‘Alternative Theory’ That XRP Is Not A Security
An amended class-action lawsuit has been filed against Ripple that has claims of misleading advertising as well as unfair competition. The amended lawsuit also furthers speculation that XRP does not qualify as a security.
The two-year class action lawsuit states that Ripple, a firm offering blockchain-based payments infrastructure, went against the set securities rules during the sale and marketing process of XRP. Now, the amended suit claims that the firm as well as its CEO, Brad Garlinghouse, were involved in fraudulent business practices, CoinDesk reports.
The lead plaintiff in the suit is Bradley Sostack who is an ex-XRP investor and is suing Ripple as a representative of all the investors who bought XRP tokens from the company. The refiled suit states that Ripple raised millions of money by selling unregistered security, XRP, to unsuspecting retail investors.
According to official documents from the courts that were submitted on March 25, the sixth claim for relief alleges that Ripple was involved in misleading advertising which is against the California business laws. The investors state that the claims for relief were made “under the alternative theory that XRP is not a security.”
The amendment also brings forth a seventh claim accusing Ripple of engaging in an unfair competition that is against California law as well as a claim that XRP does not qualify as a security.
The fresh amendments appear to introduce new “alternative theory” into the lawsuit just in case the judge presiding over the case issues a ruling stating that Ripple did not engage in promotion and selling an unqualified or unregistered security.
The amendment also cites a statement by Ripple and its CEO, Garlinghouse, on claims that XRP is only used as a utility token which is important in enhancing cross-border payments and that its sale is meant for market makers. However, the plaintiffs allege that 60 percent of all the XRP is a property of Ripple and is mostly sold for investment. Garlinghouse is also accused of misleading XRP investors to hodl, while he sold his own XRP that was worth millions.
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