Daily Management Review

The third consecutive lawsuit is filed against Ripple Labs


07/06/2018


Another lawsuit has been filed against the crypto-currency start-up Ripple Labs in California. The plaintiff David Oconer demands to recognize the crypto currency XRP as a security. This will mean that the blockchain project is in violation of the law, since it did not register these assets.



wuestenigel via flickr
wuestenigel via flickr
The plaintiff also notes that Ripple Labs is promoting its crypto currency and using other mechanisms to increase its value.

The lawsuit says that last May the company announced that the distribution of 61.68 billion XRP owned by Ripple will be limited, and promised to transfer 55 billion XRP to фт escrow account. Ripple's management, including its CEO, actively advertised this fact to raise the cost of XRP, the plaintiff wrote, adding that they managed to achieve what they wanted.

"Public disclosure of information on the limitation of the proposal XRP had the desired effect. Over the next weeks, the price of XRP rose rapidly from approximately $ 0.22 per token on Dec. 7, 2017 to $ 3.38 per token on January 7, 2018," he said.

This is the third lawsuit filed against Ripple and containing similar charges. Last month, Vladi Zakinov addressed the California court, which claims that XRP is a controlled Ripple security. According to him, Ripple should register XRP before proceeding to sales.

In May, another lawsuit was filed containing similar charges. Its compiler, Ryan Coffey, stated that Ripple Labs and other respondents received huge profits from organizing an "infinite initial coin placement", and notes that their statements made investors believe in the future success of the crypto currency.

Even if the controversy over whether XRP is a security or not will be delayed, this issue is going to be actively discussed. Kyle Samani, co-founder of Multicoin, added that traders should stay away from Ripple, as this is definitely a security.

"Obviously, Ripple is a security. Fans of crypto currency, it seems, are turning away from Ripple. I want to say that if the SEC officially defines Ripple as a security, all the crypto-exchange exchanges will stop trading it. So, if this happens, the price of XRP will fall."

Ripple has repeatedly denied the charges. "We absolutely do not represent a security. We do not meet the criteria for a security based on a historical definition in the law of the courts," said Ripple's head of the market strategy, Cory Johnson, in April.

Previously, Twitter users drew attention to the fact that the US Financial Crimes Enforcement Network (FinCEN) in 2015 let Ripple to distribute crypto currency, which, in their opinion, does not allow to call XRP a security.

source: cnn.com






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