Ripple has just been hit with another new lawsuit tied to XRP.
Investor Vladi Zakinov filed a class action suit last Tuesday and named Ripple Labs, XRP II, which is the company’s licensed money services business, and Ripple CEO Brad Garlinghouse, aside from 25 other anonymous defendants. The lawsuit was filed at the Superior Court of California in San Mateo County.
The investor’s claim centers around the allegation that XRP is a security controlled by Ripple. His suit claims that he bought XRP in January 2018 and was damaged by the purchase.
Zakinov claims in the complaint that:
“XRP, despite its name as a ‘token,’ is actually a security under California law. In particular: (i) Ripple uses the funds it raised from the sale of XRP to fund its business ventures; (ii) the Company indiscriminately offers XRP for sale to the public at large; (iii) plaintiff and the Class (as defined herein) are effectively powerless to control the success of Ripple and XRP; and (iv) plaintiff and the Class members’ investment is substantially at risk and is without any security.”
The lawsuit asserted that Ripple and the other defendants were required to register XRP when offering or selling it, but they did not do so. The suit also claims that the defendants made statements that drove up prices of XRP, helping Ripple get greater returns from selling the token.
The suit claims that investors lost money on XRP, and have the potential for greater losses because the owners can not control Ripple.
Representatives from Ripple denied the allegations when reached for comment saying that:
“This is just another example of an extortionist bringing forth an opportunistic suit that lacks merit. We feel confident that the claims regarding XRP are completely unfounded both in law and fact,”
There has been no comment from Zakinov’s legal counsel as of press time.
The lawsuit comes mere days after it was announced that former US Securities and Exchange Commission officials Mary Jo White, who was former SEC chairman, and former enforcement head Andrew Ceresney, were to represent Ripple Labs in another class action lawsuit which had been filed in May by investor Ryan Coffey. That suit also alleges that XRP is a security. Court records show that Coffey’s lawsuit is still ongoing.