Legal

Ripple, XRP Investors Lawsuit Heads To Federal Court

Ripple, the cryptocurrency startup behind the XRP tokens, and its affiliated defendants have filed documents to move a consolidated class action lawsuit to federal court. According to CoinDesk, Ripple lawyers want the suit to be moved from its previous venue at the San Mateo Superior Court to the U.S. District Court in the Northern District of California.

In May, Ripple was accused of running a scam to raise hundreds of millions of dollars via unregistered XRP coins. The plaintiff, Ryan Coffey, alleged that the company created billions of XRP tokens “out of thin air” and profited by selling them and pushing them to the public in what the lawsuit called “essentially a never-ending initial coin offering” (ICO).

Though Coffey eventually dismissed the case voluntarily, the company was soon hit with additional lawsuits alleging securities fraud. This consolidated class action combines the previous lawsuits filed by plaintiffs Avner Greenwald, David Oconer and Vladi Zakinov. The defendants now include Ripple, its subsidiary XRP II and nearly a dozen others.

In court documents published on Nov. 7, Ripple attorneys argued that the consolidated suit matches the requirements for a case to be brought before the federal court. They cited that there are more than 100 plaintiffs, with at least one being a citizen from a different state than the defendants, and the total amount being sued for exceeding $5 million.

In addition, the documents give a glimpse of the company’s defense, writing: “Plaintiffs do not allege that they lacked information about the nature of these transactions. Nevertheless, Plaintiffs claim that they were somehow injured because the Defendants were allegedly required to register XRP as a ‘security’ with the Securities & Exchange Commission (SEC), but failed to do so.”

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