Ripple has recently found himself a defendant in various civil rights lawsuits. It was mostly about buyers of the crypto currency Ripple XRP, who want to sue for damages. The details of the various lawsuits can be found on the blog.
Now Ripple can look forward to a first partial success. For example, the United States District Court for the Northern District of California has rejected a major claim by plaintiff Coffey in favor of Ripple. The point was that Coffey apparently wanted the lawsuit to be heard at the California state court. The ripple lawyers, however, wanted to reach a referral to a US federal court. This option is based on the Class Action Fairness Act, which was introduced in 2005 as part of a reform of US tort law. The advantage of such a procedure for Ripple lies in the legal force. If a judgment of a federal court becomes final, it binds other courts. So if Ripple wins, nobody could blame the company for selling unregistered securities.
Coffey filed a lawsuit against Ripple on May 3, 2018, against the old-established law firm Taylor-Copeland Law. The lawsuit was directed against Ripple, wholly owned ripple daughter XRP II and Brad Garlinghouse. As a rationale, Coffey first stated that Ripple was not sufficiently decentralized and was primarily trying to increase the price of its cryptocurrency XRP.
It may be that Ripple XRP will never be decentralized enough to fall into the SEC's security definition. Still, it would not be unusual for the company to invest in Ripple Labs to increase profits and increase its coin price. For example, Ripple Labs is currently considering expanding its RippleNet in Asia, Africa and the Middle East. If it came to that, surely it would increase the price of Ripple XRP.
Coffey also substantiated its claim that Ripple is conducting a “never ending Initial Coin Offering (ICO)”. So the company could produce and sell an unlimited amount of Ripple XRP. In addition, Coffey complained that Ripple Labs paid large sums to large crypto exchanges like Gemini to be listed there.His main argument, however, was that Ripple Labs sold unregistered securities (in the form of Ripple XRP). Coffey stated:
“The defendants themselves acknowledge that XRP investors have a reasonable expectation of profit. Accordingly, the defendants have praised the performance of XRP on numerous occasions. “
Coffey reportedly bought 650 XRP coins for $ 1,260 in January. A few weeks later he is said to have sold her again with a loss of 551 USD. If Coffey had kept his ripple XRP, they would have been worth $ 193.80 at the time of writing.
It now remains to be seen how the relevant US federal court decides on the matter.
Sources: Court order (English), Taylor-Copeland Law, Pixabay
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/ripple-xrp-ringt-success-property-incorporation-in-california/
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