Ripple Failed To Dismiss The XRP Token Securities Lawsuit

Ripple failed to dismiss the lawsuit that alleged XRP tokens are still unregistered securities which could threaten to destroy the established XRP market according to the motion as we are reading more in the Ripple news.

Back in 2019, a complaint was filed against Ripple saying that the XRP tokens are unregistered securities under US law and it represented an update to another lawsuit that was filed against the San Francisco-based platform in 2018. The complaint argued that Ripple broke the securities laws in California and made false advertising and posed as unfair competition. Ripple even made the difference between XRP and the enterprise solutions dark in order to drive the demand higher. The startup paid exchanges to list the token. It even limited the supply of XRP to boost the price appreciation and make false statements saying that the digital asset is not a security.

The plaintiff demanded XRP be seen as a security and wanted compensation for incurred losses but ripple filed a motion to dismiss the lawsuit in 2019 saying that the case was not moved forward in a timely manner. The new court documents show that Judge Phyllis Hamilton of the Court of the Northern District of California dismissed the claims that the plaintiff failed to act on time.

Hamilton even saw the company not violating the state laws and the false advertising claims were also dismissed against the CEO of Ripple Brad Garlignhouse. The case remains open but Ripple fails to dismiss the lawsuit despite the belief that it is moving forward and could destroy the already strongly built XPR market. As per the motion:

 “Were Plaintiff allowed to belatedly challenge the classification of XRP, it would not only threaten to eliminate XRP’s utility as a currency, but it would upend and threaten to destroy the established XRP market more broadly […] potentially wiping out the value held by the alleged thousands of individual XRP holders around the world.’’

Ripple fears that its token could see something similar that it happen to some of the other cryptocurrencies. For example, SEC sued KIK for conducting an illegal $100 million ICO and penalized the platform. Right after that, KIN collapsed more than 90 percent. The company maintains that XRP was sold with clear utility and was marketed with ‘’securities like language.’’ Many in the industry believe that the SEC will take action against XRP. The fintech lawyer Jake Chervinsky maintained that the agency enforcement will move quite slowly under the best circumstances.