Ripple (XRP) Is Being Sued For Violations Of US Securities Laws!
There is a (class action) lawsuit which is currently aiming to sue Ripple Labs and all of its related business associates.
The reason for this court case is because many people believe XRP has violated state and federal securities laws since its inception and still is to this day. The main problem people have with Ripple is that its "token sales have raised hundreds of millions of dollars" by selling unregistered XRP tokens.
Class Action Lawsuit
Ryan Coffey, resident of San Diego has filed a "securities class action" lawsuit against Ripple. Coffey's lawyer, attorney James Taylor-Copeland, wanted compensation for damages that were enacted onto Coffey and other people who were similarly situated.
Coffey purchased 650 XRP at $2.60 per token around January 6 and sold them at approximately $1.70 per token around January 18.
XRP & It's Never Ending ICO
Unlike cryptocurrencies such as bitcoin and ethereum…all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013. LINK
From 2013 to the present, [the] defendants have been engaged in an ongoing scheme to sell XRP to the general public in a never ending ICO…Defendants’ sales of XRP to the public accelerated rapidly in 2017 and early 2018. LINK
20 billion tokens were directly given to Ripple Labs' founders and 80 billion went to the company as well. Ryan says that the defendants have earned massive profits by selling this XRP to the public quietly.
Market Manipulation Tactics Of XRP
Coffey told the court that "these ICOs have become a magnet for unscrupulous practices and fraud.”
Coffey alleges that the “defendants market XRP to drive demand and increase [its] price,” including “blur[ring] differences between Ripple Labs’ Enterprise Solutions and XRP.” LINK
Other known activities of XRP and afilliates:
Bribing Coinbase and Gemini exchanges to list their token.
Promising software firms that are connected to banks and financial institutions a large XRP option, sometimes as much as $5 Billion worth.
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$0.80 is the current price of a XRP token on Coinmarketcap. Quite a low in comparison to it's high of $3.80 on Januray 4th.
Violations Of The Securities Laws Of The United States
Coffey cited the US Securities and Exchange Commission and wrote in his filing to the court that XRP clearly did not obey SEC's strict regulations and therefore needed to be legally punished.
The XRP offered and sold by [the] defendants have all the traditional hallmarks of a security…However, [the] defendants did not register XRP with the SEC, and many of the representations [the] defendants made regarding XRP were designed to drive demand of XRP, allowing defendants to obtain greater returns on their XRP sales. LINK
Do you think XRP (Ripple) Is A Security?
Just last month, SEC was talking about legally identifying XRP and Ethereum as securities. Cory Johnson (Ripple's chief market strategist) told CNBC this in early April in response to the accusation:
We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.
I believe XRP may be a part of the Cryptocurrency space that should be evaluated. What do you think?
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Ripple has been embroiled in lawsuits pretty much since inception.
This is why centralized Blockchain will not succeed...
Ripple CEO: Oh my, let me compensate you in XRP.
500 more law suits open, same day. LOL.
SBD helps measure an off chain treasury to keep the handing out of tokens from devaluing the currency.
This all makes me consider that maybe one day block-chains will be capable of settling off network conflicts through a trusted custodian of block-chain resources.
This case is where am I, but it's often normal with cryptocurrencies, I'm waiting for the end of the year.
we do need some regulation for crypto to become legitimate and widely used
Highly rEsteemed!
Great News! RIPple is E-Coin from Mr Robot. It's horrible that it's considered a Blockchain project.
Not a defensive of Ripple Labs but I feel I need to say this because people don't always understand. Potential SEC violations are not just a Ripple problem but a problem of any blockchain which had an ICO and sales of those tokens to people or companies in the US. Additionally, Ripple blockchain is not centralized. The blockchain like Steem and Bitcoin are open sourced and anyone can run a node without any fees or XRP. Like many blockchains you choose your validator list and the official list is chosen by consensus. Source: https://ripple.com/build/rippled-setup/ This is also not defense of some of the issues that arise when one group comes to power in a system where if they leave it would cripple the system. So far I haven't seen one blockchain that has adequately solved this problem. The reason being, the nature of decentralized systems means you can have any one opt in or out of running nodes at any time and it's impossible (without getting into the potential for AI type self regulating systems) for a system like that to replace the capacity provided by any group that comes in. All of us rely instead on the trust we feel in the community as a whole and more importantly mass adoption. Now I'm feeling like I should write an article on this.