Bitcoin Manipulation Abatement LLC has filed a lawsuit in a US federal district court alleging Ripple Labs misled investors and sold XRP as unregistered security in violation of federal law. According to documents filed in the court, an entity with little online presence accused the blockchain payment firm and its Chief Executive Officer Brad Garlinghouse of raising more than a billion dollars through the sale of an unregistered security, XRP.
The lawsuit seeks to recover damages from Ripple.
Bitcoin Manipulation Abatement LLC also filed a $150 million lawsuit against crypto derivatives exchange FTX in November last year, which was subsequently dismissed one month later. Crypto exchange Binance’s CEO Changpeng Zhao expressed his thoughts on the lawsuit claims, calling them “very far fetched.”
Only scanned through the parts that explicitly had the word Binance. Honestly, all seems very far fetched. We have resolved the issues long ago.
— CZ Binance 🔶🔶🔶 (@cz_binance) November 3, 2019
This is not the first time Ripple has been accused of selling an unregistered security. The blockchain payment firm has faced its fair share of legal action, whether short-lived or not, over its XRP token, currently the third most valuable by market capitalization.
XRP investor Bradley Sostack filed a similar lawsuit in May 2018.
Ripple is facing several lawsuits over its token XRP. In May 2018, XRP investor Bradley Sostack had brought similar allegations over the blockchain payment firm. The class-action lawsuit that is currently going on alleges Ripple of deceiving investors and violating securities laws. XRP investor Sostack is seeking damages and compensation for legal costs. His primary goal is the recognition of XRP as security. However, according to an amendment filed on March 25 suggested that he was hedging his bets on the possibility the court may not acknowledge it as such. The US Securities and Exchange Commission has not taken any position on the matter yet.
Recently, Ripple Labs and its CEO Brad Garlinghouse filed a lawsuit against the video-sharing platform giant YouTube for not removing fake accounts impersonating Brad Garlinghouse and Ripple and offering fake giveaways to XRP investors. The CEO claimed that it has caused XRP investors to lose hundreds of thousands of XRP.