A class-action lawsuit against Ripple will stay in federal court, a judge has ruled. The ruling follows a motion by three plaintiffs to move the case to the San Mateo County Superior Court. While making the ruling, the court made it clear that it doesn’t affect the ‘substance of plaintiffs’ allegations.’
Breaking the news on Twitter, Jake Chervinsky called it a ‘minor but meaningful victory for Ripple.’ Chervinsky is a lawyer working with Kobre & Kim LLP, a dispute and investigations law firm.
The plaintiffs, Vladi Zakinov and David Oconer, accuse Ripple of selling unregistered securities. The two filed the motion to move the case to a lower court on December 7, 2018. On the same day, yet another plaintiff, Avner Greenwald, filed a similar but separate motion to move the case to a lower court.
The dismissal of the motion is a significant victory for Ripple. This is because in most lower courts, the judge and the jurors are usually selected from the local community. They are thus more likely to be naturally biased for the local plaintiffs. Ripple would have therefore been at a disadvantage had the court moved the case to the San Mateo County court.
The class action lawsuit could make or break Ripple, especially in the U.S. The plaintiffs accuse the San Francisco-based Ripple of selling unregistered securities. They have named Ripple Labs, its subsidiary XRP II LLC and its CEO Brad Garlinghouse as defendants. If the court were to declare XRP a security, it would have severe implications, including delisting on most major U.S crypto trading platforms.
However, the case is year away from conclusion. Ripple will move have court dismiss the case first, before it goes to trial. If the case moves past this stage, the defendants and the plaintiffs will take months conducting depositions. The judge will then decide whether or not the case should go to trial.
The class action lawsuit was first filed by Ryan Coffey, a resident of California who invested in XRP last year. His $650 investment lost 30 percent of its value in two weeks, he claimed. He accused Ripple of selling unregistered securities and illegally influencing the price of XRP.
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