XRP Market Ignores New Lawsuit Against Ripple
Ripple, the US-based fintech company affiliated with XRP, is facing yet another lawsuit after being accused of misleading investors by conducting an “unregistered offer and sale of securities.” However, the XRP market appears to have largely dismissed the news as noise.
As news started to circulate late Monday (UTC time), the XRP market did not show any immediate reaction to the news, and instead continued trading higher over the next few hours. The token did, however, lag slightly behind both bitcoin (BTC) and ethereum (ETH) overnight, on what has been a strong day for the broader crypto market.
As of press time (09:01 UTC), XRP was unchanged in the past 24 hours to a price of USD 0.219. That compares to a rise of 0.7% for BTC and 0.8% for ETH over the same time period.
The lawsuit against Ripple was filed last Friday by a company called Bitcoin Manipulation Abatement LLC, and claimed that Ripple has made “a litany of false and misleading statements” about XRP, which were “designed to drive demand” for the token so that Ripple could “obtain greater returns on their XRP sales,” Law360 reported.
In the lawsuit, which was filed with a district court in California, the plaintiff pointed out that XRP, in their opinion, is a security because those who bought it were told it would “increase in value,” while also being referred to as “investors” by Ripple. The plaintiff also noted that XRP cannot be considered a currency because “there are no products or services that can be purchased with XRP.” However, XRP can be used to purchase services and products.
Typical of a security, there is also “an expectation on the part of investors that they will profit if Ripple builds out the functionalities and alliances that it has promised,” the plaintiff wrote.
Also, in March this year, XRP investors accused Garlinghouse of touting the product, as well as suggesting that he was holding his XRP for the long-term while unloading XRP 67 million and liquidating the coins within days of getting them
Interestingly, Bitcoin Manipulation Abatement LLC also filed a USD 150 million lawsuit last year against Binance-co-owned crypto derivatives exchange FTX, accusing it of market manipulation and other allegedly fraudulent behavior. Back then, however, the lawsuit got dismissed by the court after one month, while CEO of Binance, Changpeng Zhao, also largely dismissed the lawsuit as “very far fetched”.