A class-action lawsuit that threatened the world’s third-largest virtual currency, XRP, will continue, as it was not thrown out at the request of blockchain payment services provider Ripple, according to Bloomberg on Wednesday (Feb. 26).
Ripple failed to persuade a judge in Oakland, California to dismiss the entire lawsuit, called Zakinov v. Ripple Labs Inc though U.S. Judge Phyllis Hamilton agreed to narrow its scope.
Hamilton left a complaint by investors in place, which alleged that Ripple had been selling unregistered securities.
The judge disagreed with the complaint by Ripple that the lawsuit wasn’t timely because it was filed five years after XRP was offered in 2013. Ripple has argued that the case, were it to go forward, would upend and threaten to destroy the established XRP market, which has involved over $500 billion in trading over the last several years.
The investors in question said they’d been duped by Ripple’s promotional statements and had lost money on the currency.
Wednesday’s ruling comes as concerns have arisen that regulators will find XRP an unregistered security, and possibly stop trading of the currency. The U.S. Securities and Exchange Commission hadn’t taken a position on whether XRP is a security on Wednesday.
Hamilton dismissed certain claims within the lawsuit that Ripple had made false statements under California law, but left the door open for the investors to come forward with an amended complaint.
XRP fell 8.2 percent to about 23 cents at the close of New York trading, having fallen about 14 percent this week, according to numbers compiled by Bloomberg.
Bitcoin has been friendly to crime in the past, becoming popular for perpetrators of ransomware and fraud. In one case, Shopin CEO Eran Eyal, of Brooklyn, pled guilty to securities fraud in relation to over $40 million in securities fraud. Eyal was asked to step down as head of the company and surrender $450,000 of Shopin-related cryptocurrency, along with paying $600,000 to investors.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More