Ripple Labs and Brad Garlinghouse Faces Third Securities Fraud Lawsuit
For the third time in less than two months, a fresh lawsuit has been filed against the founders of Ripple Labs Inc.
The case was filed in California’s Superior Court sitting in San Mateo County and has named Ripple Labs, its chief executive officer, Brad Garlinghouse, and XRP II LLC, a money service business unit of Ripple.
The plaintiff, through his lawyers, claims that Ripple manipulated the price of XRP by locking up 55 Billion XRP in escrow back in December.
The plaintiff alleges that the defendants have made money by breaking state and federal securities laws and misleading the public through the sale of unregistered ripple tokens (XRP).
Ripple Labs is also alleged to have promoted the XRP cryptocurrency in a bid to increase its value. One of the ways employed by Ripple to achieve this was to limit distribution.
Ripple and its top officers have consistently denied the accusations that XRP is a security. In April, Cory Johnson, Ripple’s chief market strategist said that XRP has nothing to do with a security as it does not meet the standards for what a security is based on in the history of court law.
Previously, Ripple has been sued by an XRP investor who claimed that the company was manipulating the price of XRP through improper statements by company executives and that it should have been registered as a security prior to being offered to the public.
In another case back in May, Ripple was accused of engaging in a “never-ending ICO,” and of marketing XRP “to drive demand and increase price,” despite the company’s claim that the token is not a security.
Tom Channick, Ripple’s head of corporate communication, commented stating:
“Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security.”
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