Embattled firm Ripple is facing a fresh legal challenge after a new class action lawsuit was filed in Florida.
According to reports, Ripple and a subsidiary, XRP II LLC, are subject to the claim, alongside CEO Brad Garlinghouse, which could result in further liability over the issuance of the firm’s XRP tokens.
The case alleges that the defendants engaged in the sale of “millions of dollars (or more)” in XRP tokens, despite not registering as a security with either federal or state authorities.
Furthermore, the case alleges that the defendants actively concealed the nature of XRP as a security from investors.
“On numerous occasions, Defendants made public statements claiming that XRP was not a security, when in fact it is. Defendants actively concealed from investors the true nature of XRP.”
The lawsuit has been filed by a Florida resident, Tyler Toomey, who purchased 135 XRP in November 2020, before selling at a 50% loss in December. The transaction itself was valued at less than $100, but as a class action lawsuit, other XRP investors in Florida can now join the case.
“Plaintiff seeks to represent a class defined as all persons or entities in the State of Florida who purchased XRP.”
The case is the latest legal threat to mount against Ripple and its board, following charges raised against the firm by the U.S. Securities and Exchange Commission (SEC).
After the SEC declared its belief that XRP was in fact a security, and therefore its unregistered sale illegal, numerous cases have emerged, including from investors who have sold at a loss.
Ripple continues to deny the allegations that its token is a security, despite the view of the SEC. Ripple has said it will contest the charges brought by the regulator in court.
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