Vs Ripple filed a new lawsuit that has serious chances of success

Investors filed a new lawsuit against the crypto-currency startup Ripple, which are excerpts from recent guidelines of the Commission on securities and exchange Commission (SEC) for the industry.

An updated version of the claim in the case, which has been ongoing for over a year, was submitted on 5 August and includes several new arguments to confirm that Ripple has violated the provisions of the securities laws in the sale of cryptocurrency XRP. This is the first claim, for example, which charges the Ripple needs to respond to you directly. To prepare a response, the company has until September 19. The four preceding claim in California was successfully consolidated in one Ripple and transferred to Federal court.

According to the lawyer Jake Chervinsky, the latter claim is «convincing» and supported by Belen coover Godfrey – «one of the best law firms for the prosecution in the United States.» He also noted that the document provides an explanation of why the XRP should be considered as securities at the Federal level and in California:

«This is important because in California used test of risk capital in addition to the Federal Howey test to determine whether a transaction qualifies as a security. Test risk capital is broader than the test for Howie, that is, the plaintiffs may lose on the Federal level, but to win but the level of the state.»

The plaintiffs are trying to prove the connection XRP Ledger is a distributed network underlying XRP and Ripple of the company.

Guide SEC

Probably one of the major differences between the new claim is in reference to regulatory guidance, is filed with the SEC to determine whether a particular digital asset security.

«Although the SEC document is technically non-binding, the court is likely to give him considerable attention in the interpretation of the Howey test as applied to these facts in the lawsuit,» explained Czerwinski.

Partner of the law firm Fisher Broyles, not involved in the proceedings, Rebecca Rettig reported that the leadership of the SEC to the Federal claim applies for the first time.

«Although management has no precedential value, that is, the court is not obliged to follow its provisions, it will be interesting to see how the court will use in determining the status XRP» she said.

«The acquisition of XRP is the fact of investment of money in a common enterprise, write the words plaintiffs SEC. Investors XRP had a reasonable expectation of earning income. The success of XRP depends on the actions Ripple and others. the Main plaintiff and the members of the group claim have invested in Fiat currency and other digital currencies such as bitcoin and Ethereum to buy XRP. As the SEC explains in its guidance, the investment of Fiat and digital currencies satisfy the first aspect of the Howie test».

Rettig noted that «all of the factors in the SEC guidance are based on current Federal practice, therefore, the plaintiffs are likely to turn to the relevant precedents, not only to document SEC».

The plaintiffs also mention the statements of the CEO of Ripple Nonsense Garlinghouse and technical Director David Schwartz, which can reinforce their position. So, in 2017, in conversation with CNBC Arlinghaus said:

«People see that Ripple successful as a company, and I think it increases the value of XRP».

«The lawsuit underscores the Ripple’s own statements to prove that investors XRP had a reasonable expectation of income from management activities Ripple – added Czerwinski. – In a similar way the SEC has made its own claim to the EIC».

Previously the SEC filed a lawsuit against startup Kik, saying that he violated the requirements of the securities laws of when he spent his $100 million ICO in 2017.

Tweets as proof

In addition, the document contains around 40 tweets, including messages Ripple, managers and other employees of the company, for a discussion of the listings on stock exchanges, reserves in Ripple XRP and other measures to promote cryptocurrency.

«I’ve never seen so many quotes from Twitter in one lawsuit,» said Czerwinski.

The plaintiffs did not stop and stated that Ripple misled the General public with regards to the use of different products.

«April 26, 2017 Ripple posted a tweet with a link to an article on its website, saying: «#Ripple welcomes 10 additional clients in our #payment #blockchain network.» Neither the tweet or the article’s readers were not informed that the payment in the blockchain the network is not a registry XRP Ledger, and the corporate solution xCurrent from Ripple, – the document says. – A few days later, on 3 may 2017 against a background of continuing growth of Ripple XRP posted the following tweet: «Adoption of #Ripple has fuelled interest in XRP, «I experienced a remarkable rally in the last two months,» according to @Nasdaq»».

Not only on securities

Also, a new claim was introduced some arguments that are not related to securities laws.

«First, the plaintiffs claim that Ripple violated California laws on unfair advertising and unfair competition by spreading false information about the origin, turnover volume and adoption of XRP,» said Czerwinski.

The plaintiffs demand to compensate the losses they incurred on investments in XRP. The main plaintiff, lost $118 100. The losses of the other participants in the proceedings is not yet counted were not.

More importantly, the plaintiffs want the court recognized the XRP security. This decision can directly affect the ability to sell Ripple XRP, and to limit the ability of investors to acquire the cryptocurrency.



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