Rajarshi Mitra
Independent Analyst
- Bradley Sostack had filed a lawsuit accusing Ripple of selling him XRP as an unregistered security in 2018.
- Ripple claims that these allegations have no merit and said that Sostack’s claim violates the statute of limitations.
The next phase of Ripple’s XRP lawsuit is only days away and Brad Garlinghouse, Ripple CEO, says that the whole affair is “outrageous.” In 2018, Bradley Sostack had filed a lawsuit accusing Ripple of selling him XRP as an unregistered security. Ripple had dismissed these allegations saying they have no merit and said that Sostack’s claim violates the statute of limitations.
In a CNBC interview, Garlinghouse said:
My view of this is it’s pretty outrageous. Here’s somebody who held XRP for, I think, two weeks’ time and is making some claims. Whether or not XRP is a security is not going to be dictated by one lawsuit.
Obviously, the SEC of the United States is the governor of that, and I think it’s very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple the company shut down tomorrow, the XRP ecosystem would continue to exist. It’s independent, open-source technology. From an ownership point of view, owning XRP doesn’t give you any ownership of Ripple equity. And ultimately, XRP has a lot of utility, so to me it’s quite different than what a security looks like.
Oral arguments for the case is scheduled for January 15th. Back in September, Ripple had filed a motion to dismiss the suit. Ripple argued that if XRP is actually a security, federal security regulations stipulate that Stostack should have filed his claim within three years of the initial offering of XRP, which took place in 2013.
The legal team of Sostack countered by arguing that the statute of limitations is invalidated as Ripple has continued to sell XRP. Ripple said that it has “long and widely been understood that the three-year repose period runs from when a security is first offered to the public for sale.” Ripple asked for the case to be “dismissed with prejudice.”
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