Florida class action lawsuit alleges Ripple violated securities laws

Published at: Jan. 27, 2021

Ripple Labs, the company behind the Ripple payment protocol and XRP-based products, is facing another lawsuit alleging the firm violated securities laws in the United States.

On Monday, Florida-based XRP investor Tyler Toomey filed a civil suit against Ripple Labs and Ripple CEO Brad Garlinghouse. The lawsuit alleges that the defendants failed to comply with Florida securities laws by failing to register with the Florida Office of Financial Regulation.

Toomey notes that Ripple Labs and Garlinghouse ar already facing a similar lawsuit for reportedly violating federal securities laws. The $1.35 billion suit was brought by the U.S. Securities and Exchange Commission on Dec. 22, 2020.

The new class-action suit accuses Ripple of selling millions of dollars of unlicensed XRP tokens, and generating large revenues from those sales, stating, “The overwhelming majority of Ripple’s revenue came from its sales of XRP (over $1 billion), and Ripple relied on those sales to fund its operations.”

The plaintiff also claims that Ripple made false statements about XRP by saying that the token should not be classified as a security. Toomey argues that the defendants knew that XRP was indeed a security:

“Defendants made false statements and/or omissions regarding material facts related to the true nature of XRP. Specifically, Defendants knew that XRP was in fact a security, but affirmatively misrepresented to investors that it was not a security. Defendants knew XRP was a security before Defendants sold XRP into the market.”

Pursuant to federal rules of civil procedure, Toomey has requested a trial by jury for any and all issues brought in the action.

Shortly after the SEC brought their action against Ripple in late 2020, a wide number of crypto companies including Coinbase and Binance.US delisted XRP from their platforms. Massive delistings apparently affected the XRP market, with Polkadot’s DOT overtaking XRP in terms of market capitalization on Jan. 15. XRP dropped has more than 2% over the past 24 hours. At publishing time, the coin is trading at $0.26, according to Cointelegraph’s XRP price index.

Tags
Regulation
United States
Sec
Cryptocurrencies
Law
Xrp
Ripple
Court
Florida
Related Posts
New petition asks SEC chair nominee Gary Gensler to drop Ripple lawsuit
The Ripple community has launched a new petition to “stop the war” on XRP. Crypto & Policy founder Thomas Hodge has started a Change.org petition directed at Securities and Exchange Commission chair nominee Gary Gensler, asking him to end the SEC’s lawsuit against Ripple once he’s confirmed as chairman of the commission. Announcing the news Wednesday, Crypto & Policy called on Gensler to investigate the potential motives of former SEC chair Jay Clayton and his SEC Director of Corporate Finance William Hinman for “favoring” Bitcoin (BTC) and Ether (ETH) while harming XRP. The petition alleges that Clayton and Hinman could …
Bitcoin / April 8, 2021
Ripple CEO Garlinghouse responds to SEC complaint against XRP
Ripple CEO Brad Garlinghouse has responded to the latest regulatory complaint against XRP, assuring shareholders that the company will prove their case in the court. In a Dec. 22 blog post, Garlinghouse argued that the legal action against the XRP cryptocurrency brought by the United States Securities and Exchange Commission is an “assault on crypto at large.” The executive is confident that the regulatory action will have a “snowball effect” on the industry as a whole, potentially affecting major players like Coinbase and all other cryptocurrencies, not just Bitcoin (BTC) and Ether (ETH): “Ripple, Chris and I may be the …
Regulation / Dec. 23, 2020
Ripple files final submission against SEC as landmark case nears end
The most talked about crypto lawsuit involving the United States Securities and Exchange Commission (SEC) and Ripple is approaching its conclusion after a two-year-long battle. On Dec. 2 the SEC and Ripple both filed redacted replies to each other’s opposition to motions for summary judgment. Ripple argued in its motion document that the SEC has failed to prove that its offering of XRP between 2013 and 2020 was an offer or sale of an “investment contract” and therefore a security under federal security laws. Ripple concluded the document by stating that “the court should grant Defendant’s Motion and should deny …
Blockchain / Dec. 5, 2022
XRP purchasers back Ripple, arguing that it is not a security
On Dec. 22, 2020, the United States Securities and Exchange Commission filed a complaint against Ripple Labs. The complaint essentially alleged that Ripple had engaged in a multi-year, sustained practice of illegally selling unregistered, non-exempt securities in the form of its XRP tokens. This complaint, having been filed on the last day of former SEC Chairman Jay Clayton’s tenure at the commission, led to a considerable volume of public commentary, as is not unusual for SEC litigation against major players in the crypto space. What is unusual about SEC versus Ripple is the reaction from a sizable segment of XRP …
Technology / March 21, 2021
XRP price breaks out of range with a 25% rally, but why?
Crypto markets are flashing a bit of green on Sept. 22 as Bitcoin (BTC) price tacked on a 4.7% gain to trade above $19,300 and Ether (ETH) surged 6.5% to recapture the $1,300 level. RSR and and Astar Network (ASTAR) also surged by 23% and 17% respectively, but the more notable mover of the day was XRP. Currently, XRP price reflects a near 25% gain and the asset is up 41% in the past month. According to defense lawyer, James K. Filan, on Sept. 18 Ripple Labs filed a motion for summary judgement - a legal process which involves the …
Regulation / Sept. 22, 2022