The crypto firm Ripple has not yet ended its legal standoff with the SEC as another trial could involve it. Ripple is accused by individuals and companies of “illegally” selling them XRP. This is what is actually being discussed in the context of what presents itself as a class action.
What we criticize the crypto firm Ripple
Ripple, the crypto company behind XRP, faces a significant legal challenge. This is a class action brought in California. A lawsuit that accuses the company of violating securities laws via unregistered sales of its native crypto.
This legal procedure is carried on behalf of two distinct groups. In this case, the Federal Securities Claims, on the one hand, and the California State Securities Claims Class, on the other hand. Together, they constitute natural and legal persons who purchased XRP between July 3, 2017 and June 30, 2023.
Furthermore, the legal action does not only target Ripple. It also targets Bradley Garlinghouse, its CEO, and XRP II, LLC, its subsidiary. All are accused of selling XRP without the necessary registration, thereby violating federal and California securities regulations.
For the moment, there is no certainty that this complaint, although filed, will evolve leading to the opening of a trial. What we do know, however, is that investors and affected parties have until April 5 to decide whether to withdraw from the class action. They would thus retain the possibility of pursuing independent legal action against Ripple.
An already difficult legal context for Ripple?
This new legal action against Ripple does not occur in a contextual vacuum. Indeed, it is linked to the company’s legal and legal battle against the Securities and Exchange Commission (SEC).
The two actions appear to be linked by the reason on which they were opened. Namely that Ripple allegedly carried out an unregistered securities offering through the sale of cryptos in XRP. Obviously, the firm doesn’t see it that way.
Ripple’s defense has always revolved around a fundamental distinction. That XRP should not be classified as a security, but rather as a digital currency used for international transactions.
This nuance is essential, particularly for questions of impact. You should know that for Ripple, classifying XRP as a security would have the consequence of subjecting the crypto to strict regulatory requirements. This is the very essence of the legal war she has been waging against the SEC since 2020.
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