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Ripple hit with third lawsuit for securities law violation

04 Jul, 2018
by David Robb
News
Ripple hit with third lawsuit for securities law violation

Ripple Labs, Inc., and its CEO Bradley Garlinghouse, have been hit with another lawsuit for securities fraud. This is the third in as many months.

The plaintiff, a private XRP investor, claims that Ripple has conflated its crypto token with its proprietary Ripple technology, as well as illegally profiting from price increases the whole time that the currency has been active.

Like the other two lawsuits, this latest one alleges that XRP's model has enabled a continuous ICO period, which the Ripple company has funded itself by selling close to $100 million worth of their own cryptocurrency.

The San Diego-based legal team who have brought the suit against Ripple are also suggesting that social media has been used to drive up the price of the tokens. In the quarter following an announcement that 55 billion tokens were being removed from circulation, apparently in order to limit the influence of Ripple's majority control of the currency, the price rose by around 1000%.

Ripple is not currently classified as a security, and this classification could be a key deciding factor in the suit. If the suits are successful, it could set a major precedent for the global crypto industry.

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Read more about:Ripple (XRP)

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