Ripple has been sued once again over allegations that it violated U.S. securities law by selling and trading its XRP cryptocurrency. The new lawsuit alleges that the defendant conducted unfair and fraudulent business practices in violation of California law.
This new lawsuit comes as the company is still knee-deep in another class action lawsuit filed by angry XRP investors.
The legal team of a company known as Bitcoin Manipulation Abatement LLC has filed a class action lawsuit against Ripple and its CEO Brad Garlinghouse over the alleged sale of unregistered securities.
The new quirky plaintiff claims that Ripple created XRP with the primary goal of enriching its founders and some other people.
The plaintiff also accuses the blockchain payments firm and Garlinghouse of raising more than $ 1 billion by marketing XRP to the public, according to court documents presented on Friday, May 1. For the purpose of increasing XRP demand and subsequently maximizing sales profits. Ripple and Garlinghouse "They made a litany of false and misleading statements regarding XRP."
The Plaintiff further alleges that Ripple and Garlinghouse violated California securities law, and false advertising and unfair competition laws. As such, the plaintiff, Bitcoin Manipulation Abatement LLC is seeking damages and restitution regarding the stated violations.
In particular, Bitcoin Manipulation Abatement LLC also filed class action lawsuit against Hong Kong-based FTX cryptocurrency derivatives exchange in November last year. The $ 150 million lawsuit accused FTX of market manipulation, selling unlicensed securities, among others, but it was dismissed a month later by a judge of the United States District Court in California.
XRP security status is still a gray area
It is no secret that Ripple has been hit with various class action lawsuits over the years. A common key element in most of these lawsuits is whether or not XRP should be classified as a security under United States law. However, Ripple executives have vehemently refuted the thesis that XRP is a security, even citing that such a classification would nullify Ripple and the XRP token. However, the plaintiffs have insisted that XRP has all the characteristics of a value based on how it was traded and sold.
The ongoing demand Led by XRP investor Bradley Sostack is also seeking compensation for losses incurred because XRP is a security and Ripple and Brad Garlinghouse violated the law by distributing and selling an unregistered security.
Suffice it to say that the United States SEC has yet to take a stance regarding XRP's security rating.