Ripple faces fresh lawsuit linked to alleged securities offering

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Posted on: May 5, 2020 5:13 pm EDT

The controversy over whether or not XRP is a security continues to grow deeper

Ripple and its CEO Brad Garlinghouse continue facing a good share of legal action against them; this time, from a new filing presented by a company called Bitcoin Manipulation Abatement LLC. The third most valuable digital currency, XRP, has raised a lot of controversies regarding alleged violations made to federal law from its sales and marketing practices, resulting in the company consistently being accused of having illegally offered securities under existing laws. The court documents for the latest case date from May 1, and this mysterious company suing Ripple and its CEO states that over a billion dollars were raised by selling unregistered securities.

“In order to drive demand for and thereby increase profits from the sale of XRP, Defendants have made a litany of false and misleading statements regarding XRP in violation of California’s securities laws, and false advertising and unfair competition laws,” was written in the lawsuit. Bitcoin Manipulation Abatement LLC is asking for a “recover damages” payment and “obtain other relief” due to alleged violations.

Bitcoin Manipulation Abatement LLC has very little presence online and there are hardly more details about this venture. Back in November of last year, this same company presented another lawsuit against crypto derivatives exchange FTX, which was dismissed one month later. Even renowned members of the crypto community like Changpeng Zhao CEO of Binance referred to this lawsuit as “very far-fetched.”

Ripple, on the other hand, is not a stranger to lawsuits. There is an ongoing class-action lawsuit presented back in May 2018 by attorneys for XRP investor Bradley Sostack, who is making similar allegations against Ripple for allegedly deceiving investors when XRP was sold and promoted, violating securities laws. Sostack is asking for the same things as this recently filed suit, compensation for damages, and for legal costs, as well. But besides that, he also seeks to have XRP recognized as a security.