Fintech company Ripple Labs hired two lawyers from the Debevoise & Plimpton bureau, Andrew Ceresney and Mary Jo White, who is also known as the former chairman of the US Securities and Exchange Commission (SEC). They will defend Ripple labs in XRP lawsuit filed by investor Ryan Coffey.
This is reported by Law.com.
Andrew Ceresney was SEC’s director of enforcement between April 2013 and December 2016. White served as chairman of the SEC from April 2013 to January last year, until Barack Obama finished his administration.
Legal Action Against Ripple
The court document indicates that lawyers will represent the company in XRP lawsuit filed by investor Ryan Coffey last month. He bought tokens at $ 2.6, when XRP increased significantly in January, and sold at $ 1.3. In total, Coffey lost $ 585 on the deal. Coffey claims that this digital currency had to be registered as a security with the SEC. He states that Ripple has benefited from an increase in the price at the expense of investors, since Ripple supports a “centralized XRP” ledger.
The plaintiff is trying to cancel XRP purchases worth more than $300 million. He wants to establish trust in the revenue from the alleged sales of Ripple cryptocurrency.
The plaintiff believes that Ripple bribed the exchanges so that they began trading XRP and artificially merged XRP with RippleNet. Ripple Labs tried to mislead investors, inflate the XRP price and get a direct benefit from their actions.
If the court supports the plaintiff, the company will incur multi-billion losses. This will destroy Ripple and its founders, including CEO Brad Garlinghouse.
The statement also indicates that the case was transferred from the California State Court to the federal court in the Northern District of California. Ripple’s lawyers claim that the lawsuit should be reviewed in a federal court, not in the Superior Court, where the lawsuit was initially filed.
A Ripple spokeswoman said that at the time the lawsuit was filed, the SEC had not yet decided on the classification of XRP as securities.
“We continue to believe XRP should not be classified as a security. We feel confident that the claims regarding XRP are completely unfounded both in law and fact.”
Is XRP Security?
In April, former partner Goldman Sachs and government official Gary Gensler noted that Ethereum (ETH) and Ripple are likely to be classified as unregistered securities. Gensler also said that he does not classify Bitcoin as securities. He explained that it was not released through the ICO and has a decentralized development network. As for ETH and XRP, “there is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.”
If Coffey wins the trial, there will be significant damage to industry. There will be a question, which of the available cryptocurrency is actually a security. Every exchange that trades XRP and is not registered with the SEC will suffer as provided for under the law. Currently, no cryptocurrency exchange trading Ripple tokens is registered with the SEC.