Ripple: an investor complains
Ripple is at the heart of debates on the qualification of tokens, with a recent refusal to add on Coinbase for fear that the XRP is considered to be a financial title . This new affair will not make any sense since Ryan Coffey, a US citizen, recently initiated a lawsuit against the Ripple startup, accusing them of violating federal securities laws.
Coffey complains against Ripple
Coffey seeks damages ' on behalf of all investors who purchased Ripple Tokens (XRP), issued and sold by the Defendants. "
Although this is not the first time that the legal status of the XRP token has been questioned, it is the first time that a user becomes a civil party and lodges a legal appeal against the company.
The lack of connection between Ripple & XRP
Ryan Zagone, director of legal relations at Ripple, spoke last week, saying there were very few connections between Ripple and XRP .
"What is true is that we hold a significant amount of XRP, which was offered to us by some of the open source developers who created them. But there is no direct connection between Ripple, the company, and the XRP token. " Ryan Zagone
If Ripple's teams have always refuted the direct connection between the firm Ripple Labs and the XRP, this is not the case for everyone, like Gary gensler - former president of the CFTC - for whom the token of Ripple is a security.
"The developments of the XRP ledger, and the profits that investors hoped to derive from it, were, and are, entirely based on the technical, managerial and entrepreneurial work of the defendants and other third parties employed by the defendants. " Extract from the complaint Ryan Coffey
Note that paradoxically, the argument used by Ryan Zagone - the lack of connection between the company and the token - is one of the arguments usually used by the detractors of Ripple :
Ripple in the Howey test
For now, one of the only ways to determine if a crypto-asset is a security is the Howey test. However, this test has many flaws , and its criteria were established in 1946, a time already distant. This test considers that if a credit involves:
- a monetary investment;
- hope for a return on investment;
- that the aforementioned "hope" depends on the success of a group of specific people;
CoinDesk contacted Tom Channick, Ripple's director of communications, for more information. The latter explained that they had not yet received the complaint formally, but that, whatever happens, they will continue to assert that XRP should not be considered a security .
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