A class action lawsuit has been filed against Ripple in California accusing the popular XPR of violating state and federal securities by selling to the general public.
It was filed on May 3 by Taylor-Copeland Law, a securities firm that works on crypto and blockchain law. They call the sale of XRP as a “never-ending ICO” and that “Ripple tries to obscure its sales of XPR by doing so on exchanges rather than directly.” They state that the lawsuit is filed on behalf of investors who’ve sustained losses as a result of XPR tokens sold by Ripple.
The lawsuit state that the company conflated Ripple’s technology with XRP, and accuses Ripple offering bribe exchanges to Coinbase and Gemini to list their coin.
Ryan Zagon, Director of Regulatory Relations, told members of the UK Parliament why he believes that XPR doesn’t count as a security:
“XRP is open source, meaning there’s many participants that make use of that technology. There are virtual currency exchanges that do sell it to retail consumers. They do so as either an investment or payment tool. Those are exchanges not related to Ripple. We, as a company, we make use of that same open source technology. We don’t sell it to retail consumers, so we only sell it to institutional market-makers and financial institutions. We have a license out of the state of New York to cover that activity – a BitLicense. It does not allow us to sell to retail consumers – to you or me. So we sell to institutional parties, and we have a partnership for open market selling as well, but that is not to – we don’t directly sell to you or me, only to financial institutions.
There are exchanges that make use of that open source tech. That’s tech not controlled by our company that existed before our company, outside of our control. We’re just leveraging it as a tool, so they are selling it on the market – other exchanges are.
You would buy [XRP] on a virtual currency exchange from other parties that have XRP. Half the XRP is open in the market at exchanges. You would buy it on that exchange from a party that’s looking to sell it. Given this dynamic, we as a company make use of this tech in the enterprise space. There’s also exchanges selling it in the consumer space. We’ve called for a global recommendation for licensing of those exchanges to ensure that there’s consumer protection, AML and safety and soundness measures to make sure those exchanges are also safe.”
Ripple has not directly responded to the lawsuit by Taylor-Copeland Law.
Analytical. Paranoid. OCD. Interested in the world of crypto and how it affects our current world and future. New to investing, not so new to know how crypto works and influence the world of fiat currency. Blockchain is my second wife.
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