XRP investors and their ongoing battle with Ripple Labs took a step forward recently, when attorneys for the tech company filed to move the suit from the San Mateo Superior Court to the U.S. District Court, Northern District of California, last week. This particular case, which was filed in June, is one of three class-action lawsuits currently facing the White House’s cryptocurrency of choice, all of which have been brought by large numbers of investors who thought that holding the XRP token guaranteed them a return on their investment. This turned out not to be the case, however, as many sold for a loss after the price rocketed then fell sharply last year. The filing stated:
XRP purchasers reasonably expected to derive profits from their ownership of XRP, and Defendants themselves have frequently highlighted this profit motive […] Given its reliance on sales of XRP, it is unsurprising that Ripple Labs aggressively markets XRP to drive demand, increase XRP’s price, and thus its own profits.
Ripple Team’s “Tactical Brilliance”
Ripple’s desire to move the location of the hearing to a higher court reflects a perceived increased chance of success, a theory backed by securities lawyer Jake Chervinsky, who said that the Ripple legal team has showed “tactical brilliance” by requesting the move. He also called it a “seriously crafty attempt to go federal”.
Ripple suffered something of an embarrassment last week, when payments processor SWIFT denied the rumored integration with their xRapid system, so they could so with some good news. The defendants have since sought to block the move by Ripple’s attorneys, filing their own motion to remand the case back to the San Mateo Superior Court. A decision on the matter should be made by the end of the month.
Not Their First Rodeo
As well as the other two pending class action suits, Ripple also settled a separate dispute in September with former partner R3. This case focused on an option for R3 to buy up to five billion XRP tokens at $0.0085 per token through to December 2019, compared to the current price of $0.51 per token. The out-of-court settlement with R3 leaves Ripple with just the three lawsuits to fight, all in relation to the XRP token being sold as a security. Some doubt the merits of the suits, claiming this is simply the result of investors losing money on the market and suing to get it back, yet others claim that the decision could set a very serious precedent in this largely unregulated asset class.
Ripple, and their XRP token, are known to be a divisive entity in the cryptocurrency community, and while the results of all three outstanding cases are not yet known, what is for sure is that either decision will generate plenty of emotion on both sides.