Lawsuit against Ripple goes on even as US District Court dismisses fraud allegations

  • Two fraud allegations against Ripple have been thrown out, but the class-action lawsuit goes on.
  • Ripple was taken to court 2018 for selling unregistered securities alongside other allegations.

Ripple has been dealing with multiple lawsuits for several years now. In a new development, the United States District Court for the Northern District of California ruled out a couple of fraud allegations filed against the blockchain startup. However, the prominent lawsuit against the cross-border company has been allowed to proceed.

Vladi Zakinov filed a class-action case against Ripple. The two fraud allegations were part of the class-action. The blockchain startup was taken to court for violating sections 17500 and 17200 of the California Business and Profession Code. The plaintiff argued that Ripple’s CEO said that cryptocurrencies have the potential “to be more valuable than gold.” In an interview, the CEO had reckoned that XRP is “solving a real-world user case; it’s not just about speculators.”

The court also ruled that the class-action was within the law to proceed. Ripple is said to have violated the state of California’s Corporate Code 25401 and is directly related to Garlinghouse. The plaintiff quotes the CEO of Ripple, who once said in an interview:

“’ I’m long XRP, I’m very, very long XRP as a percentage of my personal balance sheet. . . . . [I am] not long on some of the other [digital] assets, because it is not clear to me what’s the real utility, what problem are they really solving . . . if you’re solving a real problem, if it’s a scaled problem, then I think you have a huge opportunity to continue to grow that. We have been really fortunate obviously, I remain very, very, very long XRP, there is an expression in the industry HODL, instead of hold, it’s HODL . . . I’m on the HODL side.’”

The class-action case was allowed to process because Garlinghouse misinterpreted the “scope and character of his XRP holdings.” The plaintiff was also given leeway to pursue any other cause of action against the blockchain startup, including the “alleged sales or offer of unregistered securities in violation of federal and California state law.”

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