A fresh new lawsuit has been instigated against Ripple which claims that the company used the sales proceeds of their XRP cryptocurrency for “funding their day-to-day operations as well as for the development of their XRP ecosystem.”
The lawsuit which was filed by David Oconer, a resident of California, lists Ripple Labs, Brad Garlinghouse and 25 other affiliates as the primary parties of interest in relation to the matter. The lawsuit reads
“Here, the XRP offered and sold by the defendants had all the traditional hallmarks of a security, yet defendants failed to register them as such. The purchase of XRP constitutes an investment contract, as XRP purchasers, including plaintiff, provided consideration (in the form of fiat, such as U.S. dollars, or other cryptocurrencies) in exchange for XRP. XRP purchasers reasonably expected to derive profits from their ownership of XRP, and defendants themselves have frequently highlighted this profit motive.”
What is Oconer looking to get out of this?
Like many other petitioners before him, Oconer is seeking damages owing to the drop in value that XRP has been experiencing since the start of this year. Oconer even argues in his claim that Ripple is not decentralized like its contemporaries (Bitcoin and Ethereum) and thus does not allow asset owners to gain some measure of control over the issuing company.
It is also interesting to note that, Garlinghouse has time and again publicly stated that “XRP is not a security,” citing that the technology is independent of Ripple Labs and that purchasing XRP tokens does not give investors ownership of Ripple.
Lawsuits like the ones mentioned above are seemingly becoming a trend as earlier this week, another similar case was filed by Avner Greenwald, which once claimed again that ‘XRP is a security’.
Content on CryptoMode is not investment advice. Conduct due diligence before making financial commitments. CryptoMode is not liable for any losses sustained by acting on information found on this platform.