On the same day that the SEC officially filed its lawsuit against Ripple, recent XRP investor Tyler Toomey also sued the token-issuing company for violating securities laws in the state of Florida.
The legal dispute faced by the American company of cryptocurrencies, Ripple It looks like it won't end anytime soon. Along with the lawsuit imposed by the United States Securities and Exchange Commission (SEC) on December 22, the company is already facing 3 legal lawsuits where it is accused of violating US securities laws and the laws of the United States. deceptive and unfair business practices; in addition to promoting the sale of your token XRP without having a proper license to do so. The main directors of the company, Brad Garlinghouse y Chris Larsen, are also accused of profiting from XRP as an unauthorized security in the country.
In the state of Florida, the plaintiff is Tyler Toomey, a recent investor in the XRP token. Toomey, who resides in Florida, accuses Ripple and its CEO, Brad Garlinghouse, of failing to comply with the state's securities laws, since the company was not properly registered with the Florida Office of Financial Regulation by the time it began trading with its token. The plaintiff he presented his accusations and a class action lawsuit before him United States District Court for the Southern District of Florida, noting that Ripple's fraudulent and negligent practices led it to unfairly gain value of more than $1.380 billion.
In Toomey's case, his investment in him and other investors.
It may interest you: SEC files lawsuit against Ripple, as Brad Garlinghouse warned
A class action lawsuit
In the class action lawsuit, Toomey points out that Ripple was aware, since 2012, that its XRP token could be considered an “investment contract,” and yet, it offered its token in 2013 without proper registration with the authorities.
By failing to comply with established laws, Ripple failed to provide investors with essential material information about the XRP offering, and ignored all filing requirements by initiating a broad XRP offering without registration. Toomey also points out that Ripple lied to investors when he claimed that XRP was not a security, when in fact it is.
Another of the investors who filed a lawsuit against Ripple is the investment firm Tetragon Financial Group, who requested before a Delaware court the restitution of his investment in Ripple's Series C in 2019 for 200 million dollars, in addition to the freezing of Ripple accounts until he makes the requested payment.
A hard blow for XRP
Without a doubt, this has been a strong blow for both the company and the token, despite the fact that Ripple talks about XRP as an independent system, which can continue to function without the need for the company. Still, the value of XRP plummeted into free fall within days of the SEC lawsuit, and continued to plummet with the chain reaction that knowledge of this lawsuit unleashed.
Source: CoinGecko
In an almost immediate reaction, many exchanges and cryptocurrency exchanges made the decision to stop operating with the token, closing their services and commercial operations to XRP, as a protective measure in case the SEC emerges victorious in this dispute. And even the largest cryptocurrency fund manager, Grayscale, announced the liquidation and dissolution of its Grayscale XRP Trust fund.
The closure of trading with XRP on major exchanges directly affected the price of this token, which has decreased by more than 50% from its previous value, before the lawsuit became public knowledge.
A disparity of opinions
Although the SEC accuses Ripple of trading and trading XRP as an unregistered security, other government agencies in the country, such as the Treasury Department and the Financial Crimes Enforcement Bureau (FinCEN), have stated that XRP is not a security. , like other regulators in other parts of the world.
Ripple, Garlinghouse and Larsen are preparing with a much larger body of lawyers than the SEC has. The executives have stated that they will not allow this lawsuit to destroy the company or its complied with all established requirements and regulations.
At the time of writing, XRP is trading on the markets with a value of $0,25 USD.
Continue reading: Grayscale begins to dissolve XRP Trust
