The blockchain payment firm Ripple Labs is facing a lawsuit for allegedly selling XRP as security without registering it with the US Securities Exchange Commission. In a recently filed document, Ripple claimed that the lead plaintiff in the class-action lawsuit accusing Ripple of securities fraud has not demonstrated that statements made by CEO Brad Garlinghouse in 2017 are false. Ripple has accused of selling XRP to its investors without registering it as a security with the US SEC, but the blockchain firm has claimed that XRP is not a security.
Accusations against Ripple were based on “unsupported leaps of logic.”
The blockchain payment firm giant’s legal team said lead plaintiff Bradley Sostack’s allegations relating to Ripple’s purported misrepresentations about XRP were based on “unsupported leaps of logic.” Ripple claims that the lead plaintiff has not been able to explain why the alleged statements made by the Ripple CEO Garlinghouse are false. The class-action lawsuit by XRP investors was filed against Ripple Labs and its CEO Brad Garlinghouse back in May 2018.
Ripple had filed a motion to dismiss the lawsuit.
The plaintiffs in one of the original complaint had alleged that Garlinghouse had stated on Dec. 14, 2017, he was “very, very long XRP as a percentage of my personal balance sheet.” Around the same time, the CEO of Ripple is claimed to have sold 67 million XRP (worth around $16.4 million at press time). This is a misrepresentation, plaintiffs argue, coming at the time he said he was long on the cryptocurrency.
Ripple had filed a motion in June to dismiss the lawsuit, asking the court to dismiss all three counts of fraud without leave to amend. However, the lead plaintiff had filed an opposition to the motion, saying the lawsuit had met US fraud law demands, having identified “over a dozen false or misleading statements made by Ripple and its CEO Brad Garlinghouse.