Take a deep breath at Ripple Labs. The class-action lawsuit filed by investor Ryan Coffey in May this year was rejected on last Saturday, 11 August. The plaintiffs did not want to hear the case in federal court, because a positive verdict would have set a nationwide precedent. The US District Court of California, however, has decided not to handle this case. This ended the lawsuit prematurely.
The investors around Ryan Coffey sued for payment of damages because in their view financial losses arose with the investment in the cryptocurrency XRP. The crypto-currency operating company, Ripple Labs, has manipulated the XRP’s course with ” appealing ” and exaggerated ” sensational ” media reports. Managing director Brad Garlinghouse also misled investors with his ambiguous statements about the value of the XRP.
XRP by Ripple Labs – Security or Currency?
However, the key point of the application was that the XRP should be regarded as a security rather than a currency. The applicants also complained that the Ripple payment network was not designed to be distributed, such as the blockchain of the other cryptocurrencies. As a security, the XRP would fall under the United States Securities Law, which, according to the plaintiffs, Ripple Labs would have infringed long-term.
After careful examination of the documents submitted, the district court came to the conclusion that the complaint was simply not acceptable. The strategy of not treating the case in the highest courts did not work out. Ripple Labs can breathe easy. On the one hand, there is no fundamental judgment in the Federal Supreme Court on the issue of XRP as a security or currency for the time being. On the other hand, this was the third and final lawsuit pending against the company. But as you could see from the media, Ripple Labs Inc. is threatened with new legal trouble.