Ripple Labs Sued For Bribery & Security Issues

An investor who claims they lost money buying and selling the cryptocurrency XRP has filed a class action lawsuit against distributed ledger startup Ripple, alleging that the company violated state and federal securities laws.

Ryan Coffey, represented by San Diego attorney James Taylor-Copeland, filed the suit in the San Francisco County Superior Court on Thursday. Coffey is seeking damages "on behalf of all investors who purchased Ripple tokens ("XRP") issued and sold by Defendants," naming Ripple, XRP II (the company's registered and licensed MSB), CEO Brad Garlinghouse, and 10 unnamed parties.

Ripple Labs and Garlinghouse have come under increased scrutiny in recent weeks over the degree of association they have with XRP, a cryptocurrency that surged to a market capitalization of over $140 billion in January, but has since fallen below $35 billion. Ryan Zagone, Ripple's director of regulatory relations, told a UK parliamentary committee Tuesday that "there's not a direct connection between Ripple the company and XRP."

For some observers, though, the relationship between the company and the cryptocurrency is clear. Thursday's complaint argues:

"The development of the XRP Ledger, and the profits that investors expected to derive therefrom, were, and are, based entirely on the technical, managerial, and entrepreneurial efforts of Defendants and other third parties employed by Defendants."

U.S. federal law requires companies selling securities to register with the Securities and Exchange Commission (SEC). Whether a financial instrument qualifies as a security depends on the Howey test, a standard derived from a 1946 Supreme Court case.

If an instrument involves an investment of money and carries a reasonable expectation of profits - an expectation that depends on the actions of a specifically identifiable group of people - then it is a security. Coffey's complaint argues that XRP checks off all of those boxes.

Ripple also reportedly offered to bribe popular U.S.-based cryptocurrency exchanges Coinbase, Inc. (“Coinbase”) and Gemini Trust Company, LLC (“Gemini”) to list XRP. In or about the fall of 2017, Ripple Labs is reported to have offered Coinbase more than $100 million worth of XRP to start letting users trade XRP. A Ripple executive is also reported to have asked whether a $1 million cash payment could persuade Gemini to list XRP in the third quarter of 2017. Although both Gemini and Coinbase declined to pursue these proposals, in late 2017 and early 2018 rumors that XRP would be added to Coinbase fueled its price increase. Plaintiff is informed and believed and based thereon alleges that Ripple Labs was the source of these rumors.

You can check out the full complaint on the link bellow:

Coffey+v+Ripple+Labs+Complaint by Spiry ɃTC on Scribd

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Posted from my blog with SteemPress : https://247cryptonews.com/ripple-labs-sued-for-bribery-security-issues/

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