The Northern District Court of California rejected a class action lawsuit against Ripple Labs Inc. filed by investor Ryan Coffey.
Judge Denies to Move Lawsuit Against Ripple to Lower Court
Ryan Coffey files lawsuit against Ripple on behalf of everyone who bought XRP tokens after January 1, 2013. The company was accused of illegally manipulating the XRP price.
Coffey noted that Ripple Labs constantly mislead by explaining how Ripple’ solutions and XRP are used to “Market and increase the value of XRP”, ignoring California’s corporate code and neglect of security. He also accused the company of the insufficient decentralization of the XRP token. Coffey believes that Ripple could violate several federal laws in the process of selling XRP tokens. Coffey claims to recover the losses that that caused as a result of investing in XRP.
Specifically the Court delivered the following opinion:
“Having read the papers filed by the parties and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby denies plaintiff’s motion”.
It is likely that Coffey and the law firm representing him will not appeal to the federal court, as this could create a precedent, ruling out the possibility of filing such lawsuits in the courts of first instance.
We remind that cryptocurrencies Ethereum and Ripple could be issued apparently not in accordance with US securities legislation. I was stated in late April, by the former chairman of the Commodity Futures Trading Commission (CFTC) Gary Gensler.
However, later, representative of the Securities and Exchange Commission (SEC) William Hinman said that his department does not plan to classify Ethereum and Bitcoin as securities.
More Lawsuits Against Ripple
Earlier similar lawsuits against Ripple were filed by David Oconer and Vladi Zakinov. These two lawsuits against Ripple have already been referred to the US federal courts. Plaintiffs also claim that they lost money, because they invested in XRP under the influence of the company’s statements, and assume that Ripple Labs Inc. distributes XRP as unregistered securities.