On Monday, a class-action complaint was filed against Ripple Labs, Inc. (Ripple); XRP II, LLC; and CEO Bradley Garlinghouse in the Middle District of Florida by a purchaser of the defendants’ XRP cryptocurrency over purported securities violations.
The plaintiff asserted that since 2013 the defendants sold more than 14.6 billion units of XRP digital assets, which are considered securities under federal and Florida state law, “in return for cash or other consideration worth over $1.38 billion U.S. Dollars (‘USD’), to fund Ripple’s operations.” However, according to the plaintiff, the defendants did not register their offerings and sales with the Securities and Exchange Commission (SEC) or Florida authorities as required by law. The plaintiff averred that the defendants also did not provide investors with the necessary material information about the XRP offering as required by law. Consequently, the plaintiff alleged that the defendants “chose to disregard filing requirements and initiated a vast offering of XRP without registration” and “made affirmative representations to the investing public that XRP is not a security, when in fact it is.”
The plaintiff contended that the defendants “still hold substantial XRP that they can monetize, while creating substantial risk to investors.” Furthermore, the plaintiff added that the defendants managed the price and quantity of XRP on the market. Additionally, the plaintiff noted the SEC lawsuit against the defendants and argued that after this suit several cryptocurrency exchanges, such as Coinbase, Binance.US, OkCoin, and Blockchain.com, have delisted the XRP.
The defendants are accused of violating the Florida Securities and Investor Protection Act, Florida’s Deceptive and Unfair Trade Practices Act, as well as for fraudulent misrepresentation/omission, negligent misrepresentation/omission, conversion, unjust enrichment, and money had and received.
The putative class is “all persons or entities in the State of Florida who purchased XRP,” with the exception of the defendants and related or affiliated persons or entities.
The plaintiff has sought to certify the class and for the plaintiff and his counsel to represent the class, declaratory judgment in his favor, an award for damages, restitution, an injunction, and an award for costs and fees.
The plaintiff is represented by Bursor & Fisher, P.A.