It appears Ripple`s court battles are far from over. Ripple, the California-based start-up was on June 27 of this year handed down yet another lawsuit. This follows an earlier suit that was filed by an XRP investor who alleged that Ripple was in essence manipulating the price of XRP through a number of inappropriate statements issued by the company`s executives. He further claimed that prior to XRP becoming public it ought to have been registered as a security.
In May this year, a suit was filed by Vladi Zakinov, in California’s Superior Court in San Mateo County, alleging that XRP is a security under the control of Ripple Labs. Ripple was compelled to defend itself against allegations that suggested that the company was involved in a “never-ending ICO,” and of marketing XRP “to drive demand and increase price.” Ripple has however remained resolute in its insistence that XRP is not a security.
In the latest suit, David Oconer, lead plaintiff is seeking to have the XRP cryptocurrency classified as a security. The case was filed in California’s Superior Court sitting in San Mateo County and has named Ripple Labs, its chief executive officer and XRP II LLC, a money service business unit of Ripple Labs, as defendants.
Oconer contends that XRP is very much a security, considering its management and distribution by Ripple Labs, coupled with how the cryptocurrency is conflated with the company’s product offerings. The lead plaintiff insists that Ripple`s operations constitute a violation of securities laws. The suit also claims that in a quest to ensure increase in value, Ripple Labs have been actively engaged in the promotion of the XRP cryptocurrency. It has been argued that Ripple introduced distribution limits to help achieve this end.
Is Ripple manipulating the price of XRP?
Over the course of a court case in May 2017 involving Ripple, the firm revealed that the distribution of 61.68 billion XRP that it owned would be limited, with the company placing 55 billion XRP in an escrow account. This fact was deliberately being promoted by executives of Ripple, including its CEO so as to engender price hikes, according to the lawsuit.
The lawsuit further states that the intended effect was realized. The complaint reads: “Ripple’s public commitment to limit the supply of XRP had its intended effect. In the weeks that followed, the price of XRP rapidly increased, from approximately $0.22 per token on December 7, 2017 to $3.38 per token on January 7, 2018.”
It will be recalled that only last month, while speaking at the CB Insights Future of Fintech conference in New York City, Ripple CEO presented three arguments for why, in his opinion, XRP is not a security:
They are as follows:
- “If Ripple the company shut down tomorrow, the XRP ledger would continue to operate. It’s open-source, decentralized technology that exists independent of Ripple.”
- “The people buying XRP, they don’t think they’re buying shares of Ripple. There’s a company called Ripple, we are a private company, we have investors… but buying XRP doesn’t give you ownership of Ripple, it doesn’t give you access to dividends or profits that come from Ripple.”
- “XRP is solving a problem. There’s no utility in a security.”
Hello there!!! Thanks for dropping by. Kindly share this post with your contacts. And visit this site more often for credible, juicy and up-to-date cryptocurrency news and a multiplicity of high value content.
Image from Smartereum