Ripple has failed to get the class action case against it thrown out, with the judge in the case partly granting and partly denying its motion to dismiss. The case, which dates back to May 2018, will continue onto the discovery and class certification phase and overall represents a win for the plaintiffs, who are now much more likely to get their proverbial day in court after Ripple’s continued delaying tactics failed to prevent the case from moving ahead.
The judge in the XRP securities class action has granted in part & denied in part Ripple’s motion to dismiss the case.
There’s a lot going on here, but overall it’s a victory for the plaintiffs. The securities claims survive. XRP stays in the crosshairs.https://t.co/81qSNDznaA
— Jake Chervinsky (@jchervinsky) February 26, 2020
Ripple Fails in Technicalities Claims
The complaint about Ripple, which is actually four different cases which were amalgamated into one in November 2018, centers around the allegation that Ripple Labs Inc sold XRP tokens as securities to early investors.
Ripple and CEO Brad Garlinghouse have naturally argued against this, claiming that they never offered the tokens in such a way, but after having failed to get the case thrown out, they will now be relying on a judge to decide that fact.
Ripple’s complaints were based on technicalities rather than the broader scope of the accusations of the token being a security, which judge Phyllis Hamilton said was a dispute Ripple were seemingly saving for “another day”.
These technicalities included XRP purchases being made outside of the statute of limitations, plaintiffs failing to properly state a claim, Ripple Labs not being the official seller of the tokens, and the token not being sold in California.
Ripple Loss Could Open Floodgates
In the response to Ripple’s claims, judge Phyllis Hamilton granted three of the dismissal requests but allowed plaintiffs to continue with four, including that Garlinghouse was in full control of Ripple Labs and therefore had a say in the token sale process, and also that Ripple, through its ‘how to buy XRP’ guide on its website, did in fact sell the tokens to California residents. Should the plaintiffs wind up victorious in this case, it could open the floodgates for other claims by investors in different states who also bought around that time.
