TL;DR
- Ripple has been hit with a class action lawsuit for allegedly selling XRP tokens without legal registration, and the trial is scheduled for October 2024.
- The company is also fighting the SEC in court over claims that it conducted an unregistered $1.3 billion securities offering.
Battle on the Second Front
According to a recent notice, Ripple has joined a class action lawsuit pending in the Northern District of California. lawsuit assert The Company, its subsidiary XRP II LLC, and CEO Brad Garlinghouse violated federal and state securities laws by offering and selling the underlying tokens without the required registration with the relevant authorities.
The court allowed the case to become a class action, representing two classes: a federal securities claims class and a California state securities claims class. The former focuses on all individuals and entities who bought XRP and kept their stash or sold it at a loss between July 3, 2017 and June 30, 2023.
The California securities claims class covers people who purchased XRP directly from the defendants or sold XRP on behalf of the defendants.
“Excluded from the class are corporate officers, board members and senior officers of d.defendant; Immediate family members and legal representatives, heirs, successors or assigns; and any entity in which the defendant has or had a controlling interest,” the notice reads.
The court explained that affected individuals and organizations have two options: You can either continue your case and maintain the possibility of receiving money after a potential settlement, or walk away without any benefit. However, the second option allows you to sue Ripple separately. The deadline for opt-out requests is April 5, 2024.
A trial is scheduled for October 2024, where the plaintiffs will have to prove their claims against the defendants.
Ripple vs SEC War
Those who have been involved in the cryptocurrency industry for the past few years know that Ripple has been engaged in a legal battle with the US Securities and Exchange Commission (SEC) since December 2020.
At the time, regulators accused the company of illegally raising more than $1.3 billion in unregistered securities offerings by selling XRP. Ripple argues that its tokens are a currency, not a security, and therefore do not fall under the SEC’s jurisdiction.
The case is nearing its final stage, with a grand trial scheduled for April 23, 2024. Ripple appears to have the upper hand, securing three important (yet partial) court victories last year. The first case occurred last July before Federal Judge Analisa Torres. rule The Company’s programmatic sales on secondary trading platforms do not constitute an offer of an investment contract.
A magistrate later dismissed the board’s intention to appeal the decision, while Ripple’s CEO Brad Garlinghouse and chairman Chris Larsen did. deleted Regarding all charges raised by the warden.
SEC score It’s a small matter that Judge Sarah Netburn recently ordered Ripple to release required financial records for 2022 and 2023 (as the SEC claimed).
The outcome of this incident could have a significant impact on the entire cryptocurrency industry. The price of XRP and the digital asset market could see a significant boost if Ripple wins decisively. On the other hand, the opposite scenario could lead to the implementation of strict rules, hindering the development of the sector.
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