Law firm Taylor-Copeland filed a class action lawsuit against Ripple Labs due to the sale of unregistered securities
Law firm Taylor-Copeland filed a class action lawsuit against Ripple Labs because of the sale of unregistered securities. Respondents include Ripple XRP II, and CEO Brad Garlinghouse, who is charged with distributing securities in violation of US laws.
The reason for the claim is rather trivial – plaintiff Ryan Coffey bought 650 XRP on January 5 and on January 18, exchanged them for Tether, and then for dollars, in the process of trades, he lost about 32% or $ 551.89. The plaintiff claims that he did not expect such losses because of this operation, and allegedly his perception was influenced by Ripple Labs promotional materials that spread positive news about XRP and CEO via Twitter.
Initiators claim that the defendants violated the requirements of both the Securities Act and the corporate code of California rules. As requirements, Ripple must pay all damages to the plaintiffs, whose representative is Coffey-that is, he claims that the same number of people have been affected, and to recover from Ripple the funds spent on the prosecution of the company. In addition, they demand that the distribution of XRP be illegal and prevent further violation of the law by the defendants.
As a counter-argument, Ripple spokesman said that according to the company’s classification, the XRP tokens are not securities. The crypto community as a whole reacted to the filing of the claim extremely negatively, stating that against the backdrop of negative news, they suffer financial losses. Others note that the opportunity to sue the company in principle contradicts the principles of decentralization of the cryptocurrency. In Twitter, they say that despite the insignificant amount of the claim across the industry, this scandal can create a very dangerous precedent.