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Another lawsuit was filed by investors against the company of Brad Garlinghouse, which is based on the requirements of US Securities and Exchange Commission (SEC) issued to representatives of the sphere.
This is an updated version of the plaint due to which Ripple has been prosecuted for the second year. The document was forwarded to the California state court on August 5 and includes new arguments in favor of the fact that Brad Garlinghouse’s company trespassed againstthe law in XRP tokensale.
This is the first summons that Ripple’s representatives will have to bind over to appear. However, the defendant has 45 days to respond; The citation date should be held on September 19.
Two Years of Trials
The conn of common pleas began in May 2018 when investor Ryan Coffey found a true bill against the company with an illegal tokensale.
The record argues that XRP should be recognized security at both the federal and state of California. We should note the existence in the SEC guidelines of the qualifying an asset, based on which applications were also made against the company.
The Commission’s leadership is advisory and not necessarily enforceable, but the court will most likely pay much attention to its text when interpreting the Howey test.
An updated version of the SEC guidelines was published a few months ago. Its main task is to provide an answer to the question of whether a particular token is a security.
The agency says the document was made by specialists of the SEC strategic hub.
Is a digital asset a security? FinHub staff offers an analytical framework. https://t.co/JZpxHbiaPk #FinHubSEC #Crypto #DLT #Blockchain #FinTech
— SEC_News (@SEC_News) April 3, 2019
In the amended complaint, the plaintiffs, relying on information from the SEC management, explain why they believe that XRP tokens are securities: Ripple and its affiliates are a common enterprise and any potential profit that an investor can get depends on Ripple’s actions.
To buy XRP tokens, users invested fiat, BTC and other cryptos. They had every reason to expect gains.
Tweet Is An Evidence Too
The document contains exactly 40 tweets in which Ripples representatives discuss things related to the promotion of XRP token.
For example, the following tweet is mentioned in the document:
#Ripple welcomes 10 additional customers to our #blockchain #payments network. https://t.co/LINXU9WiFB
— Ripple (@Ripple) April 26, 2017
The plaintiffs believe that here the company misleads the general public, because “neither the tweet, nor the article referred to by the record informs readers that the payment blockchain network does not refer to the XRP registry, but to the xCurrent solution for corporate clients.”
The lawsuit requires all victims to be compensated for the damages they incurred due to investments in XRP tokens. But something else is important here: the plaintiffs demand that the court recognize XRP as a security.
A judge’s decision can directly affect Ripple’s XRP tokensales. Also, the decision may limit the range of people who could purchase these tokens.