Ripple Labs, the company behind the Ripple payment protocol and XRP-based products, is facing another lawsuit alleging the blockchain payment firm violated securities laws in the United States. According to the court filing, Florida-based XRP investor Tyler Toomey has filed a civil suit against Ripple Labs and Ripple CEO Brad Garlinghouse. The class-action lawsuit alleges that the defendants failed to comply with Florida securities laws by failing to register with the Florida Office of Financial Regulation.
The lawsuit accuses Ripple of selling millions of dollars of unlicensed XRP.
Toomey noted that Ripple Labs and Garlinghouse were already facing a similar lawsuit for reportedly violating federal securities laws. The $1.35 billion lawsuit was brought by the US SEC on Dec. 22, 2021. The new class-action accuses Ripple of selling millions of dollars of unlicensed XRP tokens and generating large revenues from those sales. The lawsuit states, “The overwhelming majority of Ripple’s revenue came from its sales of XRP (over $1 billion), and Ripple relied on those sales to fund its operations.” The plaintiff also accused Ripple of making false statements about XRP by claiming that the token should not be classified as a security.
Ripple continues to face troubles.
Soon after the SEC brought their action against Ripple in late 2020, many crypto exchanges, including Coinbase and Binance.US, delisted XRP from their platforms. Massive delistings affected the XRP market, with Polkadot’s DOT overtaking XRP in terms of market capitalization on Jan. 15. XRP’s price dropped more than 2% over the past 24 hours. At the time of writing, the coin is trading at $0.26. The SEC lawsuit named the company’s CEO Brad Garlinghouse and co-founder Chris Larsen in the lawsuit. However, the blockchain company has claimed that XRP is independent of Ripple and should not be treated as a security.