Contested firm Ripple faces a new legal challenge after a new class action lawsuit was filed in Florida.
Ripple and a subsidiary, XRP II LLC, are reportedly subject to the claim alongside CEO Brad Garlinghouse, which could lead to further liability for the issuance of the company’s XRP tokens.
In the case, it is alleged that the defendants sold “millions of dollars (or more)” to XRP tokens despite not registering with federal or state agencies as collateral.
In addition, the case alleges that the defendants actively concealed the nature of XRP as security for investors.
“On numerous occasions, the defendants have made public statements claiming that XRP is not a safety when in fact it is. The defendants have actively withheld the true nature of XRP from investors. “
The lawsuit was filed by Florida resident Tyler Toomey, who bought 135 XRP in November 2020 before selling at a 50% loss in December. The transaction itself was valued at less than $ 100, but as a class action lawsuit, other Florida XRP investors can now join the case.
“The plaintiff wishes to represent a class defined as any person or entity in the state of Florida that has purchased XRP.”
The case is the latest legal threat to Ripple and its board after the US Securities and Exchange Commission filed charges against the company.
After the SEC expressed its belief that XRP is indeed a security and therefore unregistered sale is illegal, numerous cases have emerged, including from investors selling at a loss.
Ripple continues to deny allegations that its token is a security, despite the SEC’s view. Ripple has announced that it will challenge the regulator’s charges in court.
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