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Cryptocurrency Startup Ripple Facing New Lawsuit on Its Handling of XRP

May 05, 2020

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Financial technology company Ripple and its CEO Brad Garlinghouse are again facing a new lawsuit over the sale and marketing of the cryptocurrency XRP.

Stephen Palley, a blockchain and digital currency lawyer at Anderson Kill, revealed the allegations of the new class-action suit filed on Friday at the Northern California District Court.

“In what is getting to be old hat, yet another lawsuit against Ripple and Mr. Garlinghouse saying that XRP is an unregistered security, created out of thin air, and serves no real purpose except to make a couple of people really rich.”

The suit claims Ripple, the largest holder of XRP, has marketed the token to the public to raise more than $1 billion. It further alleges that the crypto startup made false and misleading statements about the cryptocurrency to increase demand.

The case was filed by lawyer Pavel Pogodin of Puerto Rico-based Consensus Law on behalf of plaintiff Bitcoin Manipulation Abatement LLC, which previously filed a $150-million lawsuit against cryptocurrency derivatives exchange FTX.

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“You do have to chuckle at the irony of a plaintiff that looks like it was created as a litigation vehicle making this charge.”

The lawsuit is the latest in a series of cases the San Francisco-based company faces.

A complaint filed in 2018 by former XRP investor Bradley Sostack alleges the company sold XRP as an unregistered security and engaged in false advertising. Ripple denies the allegations and says the XRP Ledger is beyond the company’s control and would continue to operate without Ripple’s involvement.

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