Ripple is usually known in the cryptocurrency space to push the boundaries of partnerships and to find new ways for company tie-ups. This time, however, the company based in San Fransisco was in hot water for something else.
The lawsuit filed against Ripple received a boost recently when a US judge told the court that the case will proceed along its course and that the body would not intervene with the discussion.
The lawsuit was filed against Ripple because users claimed that the firm had violated the law on securities in the course of trade. The decision was taken by U.S. District Judge Phyllis Hamilton of the Northern District of California. She noted that the case contained aspects of federal law, but that those that were regulated by state law had been taken care of.
Judge Hamilton claimed that Ripple’s claims were flimsy and that they needed a lot more to prove their case. The case was first filed in August 2019, and since then the procedure has been more or less stopped. It’s not yet clear what direction the case will take next, but Ripple is out to ensure that the ball is reminiscent of their court. The official release from the Court said:
“Based on plaintiff’s complaint and the judicially noticeable facts proffered, the court cannot conclude that defendants’ first bona fide public offer to sell XRP occurred before August 5, 2016. While defendants did acknowledge various 2013 offers and sales in their May 2015 settlement with the USAO [U.S. Attorney’s Office for the Northern District of California], the sales activity identified in that settlement does not show that defendants targeted the general public when offering to sell XRP.”
The lawsuit was filed by Bradley Sostack, XRP investors who claimed that Ripple misled investors and sold XRP as an unregistered security. Making false claims are punishable under federal law and Sostack was ready to go the distance with the lawsuit. The initial lawsuit urged the Securities and Exchange Commission to look into XRP because it was violating written regulations.
During the filing, some supporters of the cryptocurrency industry said that the case read more like an SEC love letter than a true complaint. Jake Chervinsky, Compound’s general counsel, also said that the winner was for the plaintiffs at the time. The improvement in the result may have come at the wrong time because the price of XRP has also been recently tanked.
The third-largest cryptocurrency on the charts was on a downward spiral and was trading for $0.23. The asset;s market cap was $10.31 billion while the 24-hour market volume stood at $2.58 billion. XRP was not the only crypto caught in the bear’s crosshairs as coins such as Bitcoin and Ethereum were also suffering.