A lawsuit was filed against Ripple Labs Inc. on Thursday, with the plaintiff alleging that XRP tokens were “fully generated prior to distribution” and calling it a “never-ending ICO”.
The plaintiff in question is Mr Ryan Coffey, who filed the class-action complaint to the Superior Court of California against Ripple Labs, XRP II LLC, and CEO of Ripple Brad Garlinghouse. It was filed through Taylor-Copeland Law, “on behalf of XRP investors”.
The plaintiff, Mr. Coffey purchased about 650 XRP on January 5, 2018 at a price of $2.60 each, paying about $1690. He then sold 649.98 XRP, with reductions due to transaction fees, for 1104 USDT, which was worth approximately $1138 at the time. This comes out to a loss of $551, or roughly 32% of his original investment. The filing fee of the lawsuit was reportedly close to $1450, which is close to three times the loss he faced.
It is interesting to note that the plaintiff and the lawyer are previously acquainted as can be seen from these pictures from the lawyer’s Facebook profile.
The plaintiff is also one of those who filed a lawsuit against controversial ICO Tezos, which had a 60-day filing window which ended on January 25th. His purchase for 650 XRP occurred on January 5th, and both the suits were submitted by James Taylor-Copeland.
The self-proclaimed XRP Army on Twitter lashed back at the tweet by the lawyer which proclaimed the filing of the suit, with Libertarian politician and Ripple supporter Tiffany Hayden leading the fray. She said:
“Anybody can try and sue. I hope Ripple files a counter suit to recoup their time, expenses, and any loss of value XRP suffers because of this type of crap. If the the price of XRP drops after this, maybe current XRP holders can launch a class action against this group?”
In a separate tweet in reference to the filing of the suit, she said:
“By a 27yo, living at home, who bought and sold 640 XRP, didn’t become rich within 12 days, and now thinks he can seek damages on my, and others, behalf. Nobody has permission to do anything on my behalf. Ever. Hope the slimy weasal is prepared for a countersuit.”
There have been thoughts that the suit is a way to force the SEC’s hand to determine whether Ripple is a security or not. This is in response to pressure from the Commodity Futures Trading Commission and the Security and Exchanges Commission on whether leading cryptos Ether and Ripple should be declared as securities. In an email to Bloomberg, Ripple spokesman Tom Channick said:
“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time. Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security.”
Ripple is currently trading at $0.90, with a 0.71 growth over the last 24 hours. It is left to see whether this event will have a negative impact on the price of the currency.
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