Ripple slammed with a new class-action lawsuit following recent SEC legal saga

Ripple slammed with a new class-action lawsuit following recent SEC legal saga

Amid its current legal saga with the SEC, Ripple has been slammed with yet another class-action lawsuit. This, by an independent investor named Tyler Toomey who is a resident based in Florida. The accuser alleges that Ripple violated the State’s securities laws after selling unregistered XRP tokens to him. After investing $100 in XRP in November of last year, he claims to have lost nearly $50 in December, at which time he realized that the tokens he purchased were unregistered. Tony soon discovered that other residents in the same States were sold millions of unregistered XRP during that time period.

The introductory part of the Lawsuit reads;

“This is a class action lawsuit regarding Defendants’ sale of XRP cryptocurrency tokens to Florida residents in violation of Florida securities laws. Specifically, Defendants sold millions of dollars (or more) of XRP tokens, which are securities under Florida law, to Florida investors without registering the same either with federal or Florida authorities.”

According to the state’s Securities and Investor Protection Act, “is unlawful for any person to sell or offer to sell a security within this state unless the security is exempt [or] registered pursuant to this chapter.” The suit also claims that Ripple is a security, and therefore the registration of the security before sale is made, was necessary for Ripple to stay within the state’s law.

“The Act further provides that no securities that are required to be registered under this chapter shall be sold or offered for sale within this state unless such securities have been registered pursuant to this chapter and unless prior to each sale the purchaser is furnished with a prospectus meeting the requirements of rules adopted by the commission. Ripple’s XRP tokens are securities because they qualify as “investment contracts” under Florida law.”

The lawsuit which was filed on Monday is coming just a month after the defendant was slammed with a class-action lawsuit from the SEC. Although the team at Ripple is yet to address the recent lawsuit, its CEO Brad Garlinghouse had taken to Twitter, explaining that the accusations were wrong and inaccurate.

More recently, the CEO shared that despite the heat from the SEC and the critics in the industry, it has continued to secure new customers, while recoding massive on-chain growth. While Ripple awaits a court hearing for the first case, it risks losing credibility as a network. The price of its native token, Ripple (XRP) could also sustain losses in the long run.