On Friday, a firm by the name Bitcoin Manipulation Abatement LLC filed a case against Ripple and its CEO Brad Garlinghouse. The latest lawsuit claims that the company deliberately misled investors with its offer of “unregistered securities.”
XRP, the cryptocurrency launched by fintech company Ripple, appears not to have been impacted by the news of a new lawsuit against the firm.
The XRP market currently shadows gains in the broader crypto market as Ripple faces yet another lawsuit connected to its use and sale of XRP.
Court files indicate that Bitcoin Manipulation Abatement LLC wants Ripple to pay for damages following its “litany of false and misleading statements.”
According to the plaintiff, Ripple’s offering of XRP to investors was against the securities laws. They also claim that the fintech company has used its marketing and other means to “drive demand” and benefit from its sales.
The filing at the District Court in California also claims that Ripple offered XRP to “investors” who were led to believe its value would increase. Accordingly, the plaintiffs noted, investors have “an expectation “as they believe Ripple’s efforts in marketing and partnerships will impact the value and profits of their investment.
The lawsuit also wants the court to act on the case based on claims that XRP does not qualify as a currency. In their petition, one cannot use the cryptocurrency to purchase products or services.
While that last point is entirely off, the XRP market looks like it has responded to the whole lawsuit without holding onto recent gains.
Tuesday sees the crypto trading in tandem with the rest of the top coins as assets rebound from a sluggish start to May.
Like Bitcoin and Ethereum (ETH), XRP has posted some gains in the past 24 hours to consolidate support at crucial price levels. As of press time (May 5, 2020, 12:45 UTC), the token traded at +1.96% on the day to hold above $0.21 against the U.S. dollar.
This is yet another lawsuit that Ripple must grapple with, adding to other such cases lodged in U.S. courts. On its part, Ripple and its CEO have come out to say that the token is not and should not be classified as a security.
The company has escrowed billions of XRP tokens, with former co-founder Jed McCaleb one of those to own vast amounts.
Notably, Bitcoin Manipulation Abatement LLC is the same firm that sued derivatives platform FTX for $150 million in 2019. The case lasted just one month before a court order dismissed it.