Ripple Faces a Lawsuit over $1.1B XRP Sale

Ripple Faces a Lawsuit over $1.1B XRP Sale

By Jeremy Wall | News | 7 May 2020


Bitcoin Manipulation Abatement (BMA), a mysterious Puerto Rico-based company, filed a lawsuit last Friday (May 1, 2020) in San Francisco, against Ripple and its CEO Brad Garlinghouse, over Ripple’s $1.1B XRP token sale in 2013.

The lawsuit alleges that both Ripple and Garlinghouse had violated federal and Californian laws on seven counts when hosting its $1.1 billion XRP sale.

BMA’s most notable accusations against Ripple and Garlinghouse include:

  • That Ripple publicly promoted the sale of XRP to investors to drive up demand and the price of XRP, while failing to register the sale with relevant regulators.
  • That Ripple misled/manipulated investors with false announcements to "artificially inflate the price at which they can sell XRP."
  • That XRP had no utility whatsoever during the first token sale held in 2013 and that it’s sole value came from being a speculative investment.
  • That the $1.1 billion Ripple made from the XRP token sale was more money than the rest of the company's combined revenue and cash flow.

Based on the above accusations, BMA is requesting that Ripple return all the money made in the illegal sale of XRP, and is also asking the court to award "compensatory damages."

Moreover, the BMA company appears to be representing a man named Pogodin, as the lawsuit filing says he had purchased XRP from Ripple but lost money from relying on Ripple's "misrepresentations" that the "adoption of XRP by financial institutions and banks would drive demand for XRP."

This is certainly not the first lawsuit filed against Ripple with accusations of selling XRP tokens as unregistered securities. The company has been accused of running a ‘never-ending ICO’ with the constant selling of XRP tokens and has been handed class-action lawsuits in the past.

 


Jeremy Wall
Jeremy Wall

Jeremy Wall is a financial writer and aspiring investor. He is also a cryptocurrency enthusiast who is fascinated with blockchain technology and the financial markets. When he’s not researching and learning about cryptocurrency, he’s traveling the world.


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