The investors insist that “Ripple should have made a formal application to the U.S. Securities Exchange Commission (SEC) for their cryptocurrency XRP to become a security.”
The Northern California District Court finds that claims against Ripple Labs and its token made by two investors cannot be proven.
The legal dispute, which began in May 2018, pitted Ripple Labs including CEO Brad Garlinghouse and disgruntled investors.
According to a report, the discontented investors wanted the court to determine whether the “native token XRP is, or is not a security by legal definition.”
Ripple is “adamant of the latter” and has maintained it is innocent of any legal wrong-doing throughout the proceedings.
According to court findings published online by Law360, the court made the following verdict:
The court found that the lead plaintiff failed to provide the necessary evidence in the courtroom to support multiple claims regarding XRP’s non-security status, Brad Garlinghouse’s personal holdings and monetary intentions, XRP’s sale strategy, as well as the company’s software products.
The court file concludes that “all of these accusations were ‘purported misstatements.’”
The Northern California District Court also said the plaintiff “failed to offer the factual allegations needed to show that Ripple and Mr. Garlinghouse’s statements were false when made”.
For its part, Ripple’s legal team had argued that all outstanding fraud claims were “unsupported leaps of logic.” In June 2019, Ripple’s legal team applied for a court dismissal of the claims.
In an unrelated matter, Moneygram reports it received $8.8 million net benefits from Ripple. The global remittance agency says the market development fees, which totaled $15.1 million is “partially offset by related transaction and trading expenses of $6.3 million.”
In its 2019 annual report, Moneygram defines the market development fees as the compensation for providing liquidity to Ripple’s On-Demand Liquidity (ODL) network
Ripple, which completed the acquisition of a stake in Moneygram in 2019, has so far paid Moneygram $43 million to provide liquidity for its ODL network.
Meanwhile, Whale Alert reported August 1, 2020, that 500,000,000 XRP tokens with a USD value of $134,917,611 had been unlocked at Ripple Escrow wallet.
XRP recently regained its position as the third-largest digital currency by market capitalization after the token gained 10% in 24 hours. At the time of publication, the token was trading at $0.27.