Ripple, the San Francisco-based blockchain payments company behind cryptocurrency XRP is facing another class action lawsuit just over a month after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and the companies. they began to distance themselves from cryptocurrency.
A court filing on Monday, January 25, indicates that a Florida resident and XRP investor named Tyler Toomey has filed a civil lawsuit against Ripple, its CEO Brad Garlinghouse, and the subsidiary XRP II, LLC, accusing them of violating securities law. in the United States. The plaintiff argues that Ripple and Garlinghouse were not officially registered with the Florida Office of Financial Regulation.
Toomey acknowledges that the defendants already face a similar charge accusing them of violating securities law. In December 2020, the US SEC filed a lawsuit against Ripple alleging that the company's sales from 2018 to 2020 constituted an offering of unregistered securities worth approximately $ 1.4 billion.
Meanwhile, the new lawsuit says that Ripple made sales of XRP tokens worth millions of dollars and accumulated a significant portion of the revenue from these unlicensed sales. Toomey also claimed that the company is staying afloat using this sales revenue.
"The vast majority of Ripple's revenue came from its XRP sales (over $ 1 billion), and Ripple relied on those sales to fund its operations."
The lawsuit further alleges that Ripple lied about XRP by positing that it should not be considered a security under US law while, in fact, the defendants knew very well that XRP was a security even before selling it to the public. .
“The defendants made false statements and / or omissions regarding material facts relating to the true nature of XRP. Specifically, the defendants knew that XRP was indeed a security, but affirmatively misrepresented to investors that it was not a security. Defendants knew XRP was collateral before Defendants sold XRP to the market. "
Despite the painfully long years of regulatory uncertainty, Ripple has always maintained that its XRP cryptocurrency is not a security. The firm has vowed to challenge the SEC's allegations. Ripple and the Agency will meet for a pretrial conference next month.
It remains to be seen how this new class action lawsuit will affect XRP, as well as the SEC's ongoing legal case brought against Ripple.