Another case has been filed in court against Ripple. The case accuses Ripple of violating securities laws by selling and marketing XRP tokens.
In this case, Ripple is accused of supplying XRP solely because of the wealth of the project's founders and a number of others.
A new complaint from Ripple was filed Friday in a North California district court alleging that the marketing of the XRP tokens was intended to raise more than $ 1 billion through public offering. In part, the complaint states that Ripple used misleading and erroneous questions and answers to achieve this goal. XRP is currently the third largest digital currency in terms of market value.
The plaintiff was registered by Pavel Pogodin on behalf of Consensus Law. Consensus La is a law firm based in Puerto Rico. The plaintiff in the case is called Bitcoin Manipulation Abatement. The interesting thing about this company is that there is no trace of it on the Internet. According to public archives, this institution was established in March 2019 (April 2018) and Pogudin has been mentioned as one of the lawyers of this company.
Stephen Palley, a senior executive at Anderson Kill Law Firm, tweeted today:
You really have to laugh at the fact that the plaintiff's company seems to have been created just to have a means to sue.
Another interesting point is that Bitcoin Manipulation Abatement was the plaintiff in another case that was filed in November (November 1998) against the FTX exchange. The company was seeking $ 150 million in damages for the damages. The case was dismissed a month later due to lack of evidence.
Ripple currently has several open lawsuits filed by California-based investors. Ripple's failure to register the XRP as a trust in the US Securities and Exchange Commission (SEC), as well as the lack of a public offering of documents, has reportedly caused damage to California investors. Keep in mind that such cases usually have several different plaintiffs, and when filing a complaint, a lawyer or law firm, on behalf of all the plaintiffs, will file charges.
The complaint against Ripple cites features of the XRP, such as the idea that tokens can be profitable and that they will grow in the long run. According to the plaintiff, XRP is not a currency, as no products or services can be purchased with these tokens.
In another part of the complaint, unlike decentralized digital currencies such as Bitcoin and Atrium, which are extracted through nodes in a decentralized manner, the existing 100 billion XRP tokens were created centrally and at a low cost to Ripple in 2013.
At the time, 20 percent of these tokens belonged to the founders, and another 80 percent remained with Ripple. This 80% was placed in a specific account under certain conditions, and Ripple ensured that a certain amount of this account was entered into the Ripple inventory cycle each month. Ripple has also sold some XRPs in exchange in the past. Ripple has stopped selling tokens at exchanges since last year.