Florida class action lawsuit alleges Ripple violated securities laws

Ripple Labs, a company behind the Ripple payment protocol and XRP-based products, is facing another lawsuit alleging the firm violated securities laws in the United States.

According to a Jan. 25 court filing, Florida-based XRP investor Tyler Toomey has filed a civil suit against Ripple Labs and Ripple CEO Brad Garlinghouse. The lawsuit alleges that the defendants failed to comply with Florida securities laws by failing to register with the Florida Office of Financial Regulation.

Toomey noted that Ripple Labs and Garlinghouse were already facing a similar lawsuit for reportedly violating federal securities laws. The $1.35 billion suit was brought by the U.S. Securities and Exchange Commission 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, stating, “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 claimed that Ripple made false statements about XRP by claiming that the token should not be classified as a security. Toomey argued that the defendants knew that XRP was indeed a security:

“Defendants made false statements and/or omissions regarding material facts related to the true nature of XRP. Specifically, Defendants knew that XRP was in fact a security, but affirmatively misrepresented to investors that it was not a security. Defendants knew XRP was a security before Defendants sold XRP into the market.”

Pursuant to federal rules of Civil Procedure, Toomey requested a trial by jury of any and all issues brought in the action.

Shortly after the SEC brought their action against Ripple in late 2020, a wide number of crypto companies including Coinbase and Binance.US delisted XRP from their platforms. Massive delistings apparently affected the XRP market, with Polkadot’s DOT overtaking XRP in terms of market capitalization on Jan. 15. XRP dropped more than 2% over the past 24 hours. At publishing time, the coin is trading at $0.26, according to Cointelegraph’s XRP price index.