A US resident filed the third lawsuit against Ripple Labs, XRP II LLC and CEO of Ripple, Brad Garlinghouse. David Oconer wants to recognize the XRP token as a security. In his opinion, this is evidenced by mechanisms for managing and distributing the cryptocurrency in order to increase its value.
Third Lawsuit Against Ripple
David Oconer recalled that in May 2017 the company decided to limit the supply of crypto currency in the market. Ripple Labs announced its intention to deposit 55 billion XRP tokens on the escrow account. This news was actively advertised by Brad Garlinghouse, which significantly increased the value of the coin.
From December 7, 2017 to January 7, 2018, the XRP price increased from $ 0.22 to $ 3.38.
David Oconer believes that Ripple violated the securities laws by its actions.
Previous Lawsuits Against Ripple
This is the third lawsuit against Ripple about the deliberate overstatement of the XRP price. In May, one of the investors of the company Ryan Coffey accused the company of organizing an “endless ICO” and issuing coins “out of thin air”, as well as in an attempt to bribe a large cryptoexchange. In June, the investor from California, Vladi Zakinov, appealed to the court. His complaint stated that the company did not register the XRP token before the sale, although there is evidence that XRP is a security controlled by the company.
In addition, since the fall of last year, there has been a trial between Ripple and R3 over the option contract for 5 billion XRP tokens. R3 accuses the company of the fact that under the agreement, Ripple had to sell R3 XRP at a fixed price. Ripple states that the agreements were misunderstood. In March, the lawsuit was transferred from California to the court of New York.
As for claims from investors, Ripple denies all charges, pointing out that the XRP token does not meet the criteria of the security based on the historical definition in the law of the courts.
In April, former head of the U.S. Commodity Futures Trading Commission (CFTC) Gary Gensler argued that XRP could be issued in violation of US securities legislation.
It is interesting that in 2015 the US Financial Crimes Enforcement Network allowed Ripple to distribute cryptocurrency, and this fact proves that XRP is not a security.
The third lawsuit against Ripple is bad news for company. It may affect the XRP price in the coming days and weeks.
XRP would benefit from listing on Coinbase. But Coinbase hesitates to add XRP since it is still not clear whether XRP is a security or not.