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Ripple hit with fresh allegations in XRP securities lawsuit

Oliver Knight

The Ripple foundation has been dealt a fresh blow with two new accusations being lodged in a class-action lawsuit by XRP investor Bradley Sostack.

The lawsuit was originally filed by in 2018 with Sostack alleging that Ripple had sold the XRP token as an unregistered security, which is in breach of US securities law.

An amendment to the lawsuit was made last Wednesday with claims that Ripple engaged in false advertising under California law.

“Lead Plaintiff brings this sixth claim for relief for false advertising in violation of California Business and Professions Code Section 17500 under the alternative theory that XRP is not a security.

“Defendants operate a business where they intended to, and did, sell XRP to members of the general public, including Lead Plaintiff.

“Defendants cause to be made or disseminated through California and the United States through advertising, marketing and other publications, statements that were untrue or misleading, and which were known, or which by the exercise of reasonable care should have been known to Defendants, to be untrue and misleading to consumers and Lead Plaintiff.”

Ripple CEO Brad Garlinghouse has been open in his defence of the company over the past year, adamantly repeating that XRP is not a security while labelling the lawsuit as people spreading fear, uncertainty and doubt.

There has also been allegations against Garlinghouse who is accused of selling 67 million XRP tokens despite publicly stating that he was holding it for long term gains.

However, as reported by Coin Rivet in March, Garlinghouse told the Financial Times that XRP token sales have been key to ensuring the company continues to turnover a profit.

The XRP token is down 2.81% against its Bitcoin trading pair this morning while being 1.94% up against the US Dollar.

The market cap of XRP remains at around $7.5 billion, making it the third largest cryptocurrency in circulation.

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