Ripple Labs Takes XRP Cryptocurrency Security Lawsuit to a Federal Court
Ripple Labs, one of the largest cryptocurrency companies in the market removed a lawsuit related to XRP being considered as a security to the federal district court. The attorney that supports Ripple has decided to retaliate over the allegations about Ripple not being registered as a security.
In a notice of removal filed during the last week the attorney, Peter Morrison explained that consolidated litigation against Ripple was eligible for removal due to the fact that an Israeli resident is also involved on this issue.
Morrison used the Class Action Fairness Act to push three points and back the removal of this lawsuit. Moreover, he explained that the lawsuit meets all the necessary requirements. The class action can be removed if the action purports to be a ‘class’ action brought on behalf of 100 or more members, or if any member of a class of plaintiffs is a citizen of a state different from any defendant. Another requirement was related to the amount in controversy exceeding $5 million dollars.
The class actions against Ripple are related to the company issuing and distributing the XRP token. Plaintiffs say that XRP should have been considered as a security and registered as one. Moreover, other plaintiffs argue that the company and its CEO have been manipulating XRP price to maximize profits from sales of XRP tokens.
Morrison wrote about this issue:
“Plaintiffs do not allege that they lacked information about the nature of these transactions. Nevertheless, Plaintiffs claim that they were somehow injured because Defendants were allegedly required to register XRP as a ‘security’ with the SEC but failed to do so.”
XRP has always been a very controversial cryptocurrency. There are some experts that do not know whether to consider it a security or not and regulatory agencies do not have a clear answer about what to do with it. The company has always been claiming that XRP is not a security and that they ecosystem is decentralized.
At the beginning of the year, the company started a campaign to clearly distinguish between Ripple and XRP. Ripple currently holds an important portion of XRP in escrow accounts. Using smart contracts it allows 1 billion XRP to be freed every single month in order to develop the Ripple ecosystem and products.