David Oconer, who is the primary plaintiff in the latest securities fraud case being handled by the California Superior Court, alleges that Ripple has conflated its token with proprietary Ripple technology and illegally profited from price increases accelerated by its own promotions.
The three lawsuits the Silicon Valley-based firm faces claim that, “The nature of the XRP’s centralised and mining-free distribution model has allowed for a continuous ICO period, in which Ripple Labs have been funding themselves by selling close to $100 million (£756,000) worth of their own cryptocurrency – and that’s just in the last quarter of 2017.”
Experts in the matter say that the crypto industry as a whole faces a critical precedent if, through all three lawsuits, it is proven that the XRP token has been an illegal ICO operating under the US Securities and Exchange Commission (SEC). That would leave Ripple and Garlinghouse liable for illegally trading millions of dollars worth of securities.
Also, according to Legaltech, if Ripple’s lawyers lose this battle, XRP may be forced to cease trading: investors who purchased XRP tokens may be eligible for full refunds, and the company’s executives could face criminal charges.
The California court has focused on Ripple’s publicity regarding the placement of 55 billion XRP tokens in escrow as a means to “ensure certainty of total supply”, by which it apparently wanted to reassure investors that its majority control of XRP’s total circulation would not be abused by major unexpected sell-offs. Immediately after the announcement, XRP’s price rose by 1,000%.
George Town, Grand Cayman, 22nd November 2024, Chainwire
Las Vegas, US, 1st November 2024, Chainwire
From digital art to real-estate assets, NFTs have become a significant attraction for investors who…
Singapore, Singapore, 21st October 2024, Chainwire
HO CHI MINH, Vietnam, 17th October 2024, Chainwire
London, UK, 16th October 2024, Chainwire