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October 3, 2022
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XRP in trouble: Ripple faces another lawsuit in Florida

Florida lawsuit: Ripple has already faced a similar case brought against it by the SEC, which alleges that the XRP token is a security and not a crypto asset

Ripple Labs is facing another imminent process, as the cryptocurrency firm was sued by Tyler Toomey, a Florida-based XRP investor.

According to this new lawsuit, Toomey claims that the payments protocol company violated the laws that guide securities in Florida by failing to properly register with the state’s financial authorities and by selling its XRP token to retail investors without any form of restriction.

The lawsuit filed in Florida accuses Ripple Lab of generating funds through token sales to cover its operating cost. The claim is that the company achieved this by selling the assets to several retail investors, while controlling its supply and liquidity.

Toomey acknowledges the fact that the cryptocurrency company was already facing a similar case brought against it by the United States Securities and Exchange Commission (SEC), which claims that the XRP token is a security title and not a crypto asset. However, he goes a step further when he says that Ripple knew the token was a security, but he deliberately chose to mislead investors by saying it was not.

Brad Garlinghouse, the CEO of Ripple, is an individual defendant in the legal case. Garlinghouse was said to have sold nearly $ 150 million in XRP between 2017 and 2019 and also attracted more investors to the asset through different interviews he gave, in which he exaggerated the token and predicted that its market value could reach “trillions dollars ”.

The claimant lost more than half of his investment in XRP tokens between when he bought them on November 24, 2020 and their sale on December 7 and 28, 2020.

Ripple and its lawsuits

Tyler Toomey’s lawsuit is not the only imminent lawsuit Ripple is facing. The cryptocurrency company is also facing a class action lawsuit filed against it by Bradley Sostack in 2018. At the same time, the company is preparing to face the SEC lawsuit, which is scheduled for a pre-trial in February.

Tetragon, a leading asset manager, has also filed a lawsuit against the company as it is trying to redeem its equity at Ripple. The asset manager led a financing round in December 2019.

Due to the lawsuit filed by the SEC, the price of the XRP token plummeted and major cryptocurrency exchanges, such as BitStamp and Coinbase, withdrew the asset from their platform.

XRP is believed to be controlled by Ripple, as it had 100 billion pre-mined units, unlike other cryptographic assets like Bitcoin.

Ripple, however, denied any wrongdoing against the authorities with the company, saying it would rise up against the SEC on behalf of the cryptocurrency industry. The company also, at different times, demanded that the authorities clarify the regulations that protect the crypto space.

Source: Coinspeaker

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