Amended Complaint Against Ripple Claims XRP Is Not A Security

An amended complaint against Ripple which was filed by XRP investors in a lawsuit involving allegations of breaking the US Securities law, now shows that some believe XRP is not a security. Let’s find out more in the following Ripple news.

The two-year class action lawsuit claims that Ripple violated the securities rules with the sale of XRP tokens and the lawsuit was refilled with more claims to back up the case that the CEO of Ripple Brad Garlinghouse was involved in some fraudulent business practices. The amended complaint with the former XRP investor Bradley Sostack who is the lead plaintiff was brought on behalf of the investors who bought XRP tokens issued and sold by ripple. He alleges that there was a scheme to raise millions of dollars with the sale of XRP which was unregistered security, to retail investors.

According to the court documents, the sixth claim for relief shows false advertising and violating the California business law. This amendment seems to see the plaintiffs going back to their original case saying that the claim was made ‘’under the alternative theory what XRP is not a security.’’ Another claim accuses that the company entered into unfair competition in violation of California law and alleges that XRP is not a security.
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The amendment aimed to place alternative theory into the suit in the case that ripple didn’t issue XRP as an unregistered security.

The other changes to the suit state that Garlinghouse’s statements about XRP being a utility token and it is essential for international payments and that the sales are only for the market makers. However, more than 60 percent of the XRP is owned by Ripple and none of the XRP is actually used for anything.  The plaintiff also claims that the long positions that Garlinghouse claims were ‘’false when made as throughout 2017 Garlinghouse sold millions of XRP on various cryptocurrency exchanges. Review of the XRP ledger indicates that Garlinghouse sold at least 67 million XRP in 2017 and that he sold any XRP he received from Ripple within days of such receipt.”

The plaintiffs had the option to re-file the claims under the California law in the following 28 days. The suit could proceed to trial as per the court order and the action could include claims filed under the federal law however Judge Hamilton dismissed some of the claims. The order followed a hearing of Bradley Sostack and the CEO of Ripple.