A San Diego lawyer recently filed a lawsuit on behalf of an investor against the operator of Ripple. Ten other parties have so far participated in the class-action lawsuit for the disputed violation of the U.S. federal securities law. The complaint alleges that the XRP is a security and not a currency. In addition, Ripple Labs allegedly attempted to bribe Coinbase to trade there.
As you can see from the Forum Reddit, several investors have filed a lawsuit against Ripple in the last few days. Attorney James Taylor filed the lawsuit for Ryan Coffey on behalf of all investors who purchased the crypto currency Ripple (XRP). Plaintiff Coffey feels betrayed by Ripple Labs Inc. In his opinion, the company had created new coins from nothing but „thin air“ in 2013. The complaint states that the sale of new coins, which was not registered with the SEC, had flushed several hundred million US dollars into the company’s coffers. Unlike Bitcoin or Ethereum, the XRP is not produced by traditional mining. The plaintiffs therefore speak of a „never ending ICO“. In the complaint it is besides stated, one tried to bribe the operators of on-line stock exchange Coinbase so that these take up the XRP with itself.
Class action brought against Bitcoin code
The controversial point here is whether one regards the Bitcoin code as pure crypto currency or as security (security), because no mining takes place. Securities such as tokens from ICOs fall under the Securities Act of the USA, which applies in all federal states. According to SEC Chairman Jay Clayton, pure means of exchange such as Bitcoin do not fall under it. However, Clayton also believes that the ripple is a security. The creators of Ripple created the network with 100 billion XRP and transferred 80 billion XRP to the for-profit operating company. To date, the company owns more than half of the coins stored in an escrow. Read more about it: Bitcoin Code Review 2018 » Full Scam Check
Ripple’s spokesman told Coindesk that the lawyer’s tweet had told them about the lawsuit. The company does not yet have any documents that can be commented on. Whether the XRP is a cash or an investment must be decided by the SEC in due course. Ripple Labs firmly believes that this is a digital medium of exchange and not a security.
Bitcoin code has to put its foot down
The action of the eleven parties should still be exciting. The United States Securities and Exchange Commission (SEC) must finally clarify whether the Bitcoin code is a security or a regular crypto currency. As usual, Reddit’s comments are highly sarcastic. The company could not be held liable for the fact that the value of its coin had not flown to the moon. Anyone investing in crypto currencies must be aware, regardless of the coin, that prices have always been subject to extreme fluctuations. To want to make cash in court afterwards is at least not the right way for investors, says onlinebetrug.
In addition, it is worrying if frustrated investors take legal action again: Almost a month ago, with the help of a lawsuit, they wanted to demand a hard fork from the developer team behind Nano. Such court rulings entail the risk that decentralized systems could become central entities again through the arm of the law. In a column, BTC-ECHO explained that there is a trend toward more centralized ecosystems among younger crypto currencies. These recent court cases should be a warning shot for development teams behind crypto currencies, for example to become more decentralized in terms of partnerships or development.