- Lawsuit claims XRP tokens were knowingly sold as securities
- Ripple and CEO Brad Garlingbouse named in suit
- Plaintiff is the same entity that tried to sue FTX exchange for $150 million in December
Ripple has been hit with another lawsuit that claims the XRP token serves no purpose other than to make its creator rich. Bitcoin Manipulation Abatement, LLC, has served Ripple and founder Brad Garlinghouse on the charge that the pair knowingly sold XRP tokens as securities with the sole intention of enriching Garlinghouse. The company behind the claim is the same company that sued FTX exchange last year for $150 million, citing price manipulation.
Ripple “Portrayed XRP as a Good Investment”
The filing claims that Ripple both encouraged and facilitated the purchasing of XRP tokens over time and has engaged in activity designed to increase the value of the token. It also asserts that Ripple has “portrayed XRP as a good investment” and that the company is “inextricably linked to the promotion of XRP.”
The suggested reason for the desire of Ripple to inflate the XRP price is the fact that Ripple has billions of XRP tokens in escrow and has “developed a plan as to when XRP should be sold and in what quantities”. This, suggests the plaintiff, constitutes an unregistered sale of securities.
Plaintiffs’ Lack of Identity Raises Questions
The entity making the claim, Bitcoin Manipulation, LLC, is, in some cases, more interesting than the case itself. The whole ‘XRP is a security’ issue has been rumbling on since 2018, with a separate case currently underway in California, while Bitcoin Manipulation, LLC, were behind the failed attempt to get $150 million in damages from FTX exchange over supposed futures price manipulation.
Five months after having this case thrown out with prejudice, Bitcoin Manipulation, LLC, which has no public records and was only established in 2019, has set his sights on Ripple. This has resulted in amusement from the crypto legal community:
Now, all of that may well be true, but you do have to chuckle at the irony of a plaintiff that looks like it was created as a litigation vehicle making this charge.
— Palley (@stephendpalley) May 4, 2020
Ripple has yet to comment on the case, and in all likelihood won’t bother, with the usual denials the only course of action really open to Garlinghouse and the Ripple spokespeople, whose legal team must be rubbing their hands at the thought of another case coming their way.