Ripple and XRP Once Again in Legal Trouble, Under Investigation for Class Action Lawsuit
Rosen Law Firm, a global investor-rights law firm, in its recent release, has said that it is investigating whether Ripple Labs, Inc. violated federal securities laws in connection with the sale of Ripple’s XRP tokens, also known as “Ripples.” This investigation seems to be a follow-up lawsuit after the case filed by Ryan Coffey who claims he lost $551.89 trading Ripple’s XRP tokens.
Rosen Law firm involvement makes the investigation serious
Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017. The firm has been ranked in the top 3 each year since 2013. The case is being overlooked by Attorney Zachary Halper and Attorney Phillip Kim which are also overlooking some high-profile cases.
Rosen Law Firm is preparing a class action lawsuit to recover losses suffered by purchasers of Ripple’s XRP tokens. The firm has also asked investors who have purchased Ripple’s XRP tokens to visit the firm’s website and join the class action.
Also, read: Ripple Reports Sharp Decline in XRP Sales in Quarter 2 of 2018
Ryan Coffey v/s Ripple
In May 2018, using services of law firm Taylor-Copeland Law, Ryan Coffey (an individual on behalf of all other similarly situated) had filed a class action suit against Ripple Labs, its wholly owned subsidiary XRP II, and Ripple Labs’ CEO Brad Garlinghouse as they had sustained losses as a result of Ripple’s sale of XRP tokens. The complaint alleges Defendants have earned massive profits in violation of state and federal securities laws by selling XRP to the general public, in what is essentially a never-ending initial coin offering. The complaint further alleges that XRP has all the hallmarks of a security and that Ripple tries to obscure its sales of XRP by doing so on exchanges rather than directly.
The lawsuit had mentioned,
“Unlike cryptocurrencies such as Bitcoin and Ethereum, which are mined by those validating transactions on their networks, all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013
“In other words, unlike some virtual currencies, XRP was fully generated prior to its distribution.”
20 billion XRP, or 20 percent of the total XRP supply, were given to the individual founders of Ripple Labs, with the remaining 80 billion retained by Ripple Labs.”
The lawsuit also mentioned that Ripple Inc. also reportedly offered to bribe popular U.S.-based cryptocurrency exchanges Coinbase, Inc. (“Coinbase”) and Gemini Trust Company, LLC (“Gemini”) to list XRP. In or about the fall of 2017, Ripple Labs is reported to have offered Coinbase more than $100 million worth of XRP to start letting users trade XRP. A Ripple executive is also reported to have asked whether a $1 million cash payment could persuade Gemini to list XRP in the third quarter of 2017.
Although both Gemini and Coinbase declined to pursue these proposals, in late 2017 and early 2018 rumors that XRP would be added to Coinbase fuelled its price increase. The allegations seem serious and if proved correct could bring a downfall for Ripple and XRP coins.
Will Ripple be able to survive the lawsuit and prove this allegation long? Do let us know your views on the same.
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