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XRP Drops Despite Positive Report, A Lawsuit Over USD 50 Loss Emerges

Sead Fadilpašić
Last updated: | 3 min read

It seems that the recent bullish remarks by Brad Garlinghouse, CEO of blockchain company focusing on the banking sector Ripple, didn’t help XRP move higher as its price has since dropped. Meanwhile, a lawsuit against Ripple over a USD 48.56 loss has emerged.

Source: Adobe/Stanislav

At the time of writing (13:41 UTC), XRP, ranked 5th by market capitalization, trades at USD 0.254 and is down by 4% in a day and 12% in a week. However, some other coins from the top 10 club are down more today and in the past week. In either case, XRP is the worst-performing major coin in the past month and a quarter.

This week, the price dropped despite a recent report highlighting Ripple’s achievements throughout 2020.

Garlinghouse stated on Monday that in 2020, despite the regulatory challenges in the US, “by the numbers, RippleNet had a banner year.” Among other points, he wrote that:

  • the company processed nearly 3 million of RippleNet payment network transactions, which is five times the volume compared to 2019;
  • they grew their on-demand liquidity (ODL) twelve times year-over-year;
  • transactions had a notional value of some USD 2.4bn;
  • they continued to close new customer deals at a rate of 2 per week across 40 countries;
  • the number of deals signed in Asia Pacific (APAC) was up 80% year over year and there was a 1,700% growth in transactions;
  • and they signed 15 new customers after the US Securities and Exchange Commission (SEC) filed a complaint against Ripple.

The CEO reiterated the company’s hopes in the new SEC ensemble as well. “We ended the year strong and with the new administration and SEC leadership expected to be confirmed in the coming months — I feel well prepared and confident that we have the right team here at Ripple and ingredients in place to make 2021 even more successful than last year,” he said. As reported, former Commodity Futures Trading Commission Chairman Gary Gensler, who is considered to be pro-crypto and blockchain-savvy, has been officially named chair of the SEC by President Joe Biden.

However, on the same day Garlinghouse published the report, another class action complaint was filed. This time, XRP investor Tyler Toomey filed a suit “on behalf of himself and all others similarly situated” against Ripple and its CEO. Toomey sustained a loss of USD 48.56 in December 2020, or just over 50% of his initial investment, says the suit.

The latest lawsuit alleges that the defendants sold millions of dollars in XRP, which are securities under the law in Florida, USA – as they qualify as “investment contracts”- and that they did not register it with the federal authorities or Florida Office of Financial Regulation.

Toomey additionally argued that Ripple and Garlinghouse “made false statements and/or omissions regarding material facts related to the true nature of XRP,” that is, that they knew that XRP was a security before selling into the market, but claimed that it wasn’t nonetheless.

The plaintiff demands a trial by jury.

This recent lawsuit also noted the one filed in late December. As reported, the SEC sued the company and two of its executives alleging, among other things, that they raised over USD 1.3bn through an unregistered, ongoing digital asset securities offering.

This was followed by a suit against Ripple coming from the UK investment company Tetragon Financial Group Ltd. looking to force a stock redemption, as well as by suspension or delisting of XRP by a number of larger and smaller exchanges and wallets, though a few announced that they would not follow the trend.

Meanwhile, at the end of last year, XRP investors filed a petition against the SEC, claiming “irreparable harm and damages” that declaring XRP a security causes them.
Learn more:
Ripple’s Hot Takes for 2021: Surprising M&A, Ethereum Rivals and More
Fact-checking Ripple’s Claim that ‘Many G20 Gov’ts’ Call XRP a ‘Currency’
Coinbase to Face Class Action Suit over XRP Listing
How Investors in Ripple Lawsuit Tripped Themselves