Lawyers Could Damage Ripple if they Want for the Methods Used by the Company to Promote XRP
Ripple is currently facing a legal battle to avoid XRP being considered a security by the U.S. Securities and Exchange Commission (SEC). It has been a tough year for Ripple and the XRP digital asset. Ripple is a company that is currently trying to make it easier for financial companies and banks to process cross-border transactions around the world.
Although this is one of the main problems the company is currently facing, lawyers could trigger other challenges for Ripple due to the way in which they have promoted the virtues of the XRP cryptocurrency.
In a recent article released by Trolly McTrollface on February 15, he explains the nature of the problem that Ripple is currently facing. The article starts by defining what fraud is. According to this definition, an act of fraud must involve two components: one must do something unfair or illegal with the intention of benefiting from these actions.
The author says that Ripple Labs has been posting on Twitter and issuing press releases related to their businesses that were incorrect and exaggerated. Indeed, Ripple Labs has stated the value of the XRP coin is linked to the usefulness as an asset for payments. Additionally, Ripple’s official site mentions that the XRP digital asset is a very important part of its payments solution.
One of the examples that the author shows is when Brad Garlnghouse, the CEO of Ripple, uploaded a tweet explaining that the world’s 3rd largest bank, MUFG, joined the Ripple network.
— Brad Garlinghouse (@bgarlinghouse) March 30, 2017
However, the author mentions that the MUFJ was not a client of Ripple Labs and that the company was not using the solutions provided by it. It has only joined the Ripple Global Payments Steering Group (GPSG). This is only a consultative body, not a network of banks that are using Ripple’s solutions.
In another tweet, Ripple says that there are more than 50 banks in Japan transferring money in real-time using Ripple.
— Ripple (@Ripple) April 4, 2017
As per the article, the statement was incorrect because the banks were only running trials of Ripple’s technology. These statements continue to be repeated over time.
For example, in one statement Ripple says that BBVA joined Ripple’s network of clients, but it is not in this way. BBVA just run a trial of Ripple’s technology to send a payment from BBVA Spain to BBVA Mexico.
Furthermore, the CEO of Ripple stated that the value of XRP is directly linked to its status as a payment asset.
— Brad Garlinghouse (@bgarlinghouse) August 24, 2017
According to Ripple, XRP will be taking the place of the current nostro and vostro funds that are around the world in different bank accounts. Thus, by promoting a false positive image of the rate of adoption of its technology and their digital asset, the price of XRP has been artificially inflated.
The author of the article wrote:
“Due to Ripple’s biased and misleading posts on Twitter and press releases, XRP investors have paid a price that they would probably never have paid, had they been made aware by the company of the true state of its partnerships.”
At the time of writing the article, XRP is being traded around $0.30 and it has a market capitalization of $12.38 billion.