Ripple and company chief executive Brad Garlinghouse have been hit by another lawsuit alleging breaches of securities law over the sale and release of the XRP coin.
A lawsuit filed in Northern California District Court alleges that the third largest market cap cryptocurrency , XRP , was released to the public to raise over $ 1 billion and stimulate demand. The case accused Ripple of making “false and misleading claims about XRP.”
The complaint was filed by lawyer Pavel Pogodin through his firm, Consensus Law. The plaintiff in the case is Bitcoin Manipulation Abatement LLC, a little-known entity with no online presence. Public records show the company was set up in March 2019.
The case claims that XRP is a guarantee, as investors have been led to believe that they can expect profit and that it is an asset for long-term growth. The law firm claims that XRP is not a currency because “there are no products or services” that are purchased using XRP.
He added that all 100 million existing XRPs were created in a centralized manner in 2013 by Ripple, and accuses the company of making huge profits by selling XRP to the general public.
Ripple faces various lawsuits by investors who accuse the company of failing to register XRP as a US security. The Securities and Exchange Commission (SEC) also provides the public with relevant documents and disclosures that accuse the company of selling XRP for profit while it is being advertised.
Last year, it is worth noting that the amount of XRP sold by Ripple decreased by 80% as it decided to halt program sales after dealing with the “spread of misinformation.” The company has also filed claims to dismiss these cases and said XRP is not a security.
Bitcoin Manipulation Abatement LLC, worth noting, has also filed a lawsuit against the FTX crypto derivatives exchange for alleged attempts to manipulate the market.