Another Investor Lawsuit Claims XRP Is a Security
A new lawsuit claims XRP is a security controlled by Ripple.
Distributed ledger startup Ripple has been named in yet another lawsuit tied to the XRP cryptocurrency, court records show.
Investor Vladi Zakinov filed a class action lawsuit on Tuesday, naming Ripple Labs, XRP II – the company's licensed money services business – CEO Brad Garlinghouse and 25 anonymous persons as defendants. The complaint was submitted to the Superior Court of California in the county of San Mateo.
Zakinov's claim centers around the allegation that the XRP token is a security controlled by Ripple. The suit states that Zakinov bought XRP in January 2018 and "was damaged thereby."
He argued in the complaint:
The filing went on to assert that Ripple and the other named defendants "were required to register XRP when offering or selling it," but they did not. Further, the suit claims, the defendants "made a series of improper statements which drove up the price of XRP," which helped Ripple receive greater returns from selling the token.
However, the suit continues, the investors lost money – and have the potential to continue losing money – because XRP owners cannot control Ripple.
A spokesperson for Ripple strongly pushed back against the lawsuit's claims when reached.
"This is just another example of an extortionist bringing forth an opportunistic suit that lacks merit. We feel confident that the claims regarding XRP are completely unfounded both in law and fact," the representative said. A request for comment sent to Zakinov's attorneys was not immediately returned.
The news comes just days after CoinDesk reported that former Securities and Exchange Commission officials - chairwoman Mary Jo White and enforcement head Andrew Ceresney - were representing Ripple Labs in another class action lawsuit filed in May by investor Ryan Coffey. That case also alleged that XRP is a security, and court records show that the case is still ongoing.
Read the full complaint below:
18-CIV-02845 by CoinDesk on Scribd
Justice image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.