A class action lawsuit has been filed against Ripple Labs, its CEO, and subsidiary. The plaintiff alleges that the defendants have violated the state and federal securities laws, engaging in schemes to raise hundreds of millions of dollars through the sale of unregistered ripple tokens (XRP).
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Class Action Lawsuit
San Diego resident Ryan Coffey has filed a “securities class action” lawsuit against Ripple Labs Inc, its CEO Bradley Garlinghouse, its wholly owned subsidiary XRP II LLC, and ten related persons. Attorney James Taylor-Copeland representing Coffey filed the lawsuit with the Superior Court of the State of California, seeking damages on behalf of Coffey and all others similarly situated.
According to the court document dated May 3, Coffey purchased 650 XRP at $2.60 per token around January 6 and sold them at approximately $1.70 per token around January 18. Coffey described:
[The lawsuit] arises out of a scheme by defendants to raise hundreds of millions of dollars through the unregistered sale of XRP to retail investors in violation of the registration provisions of state and federal securities laws.
‘XRP Genesis and the Never-Ending ICO’
Coffey detailed in his filing, “unlike cryptocurrencies such as bitcoin and ethereum…all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013.”
Citing that 20 billion tokens were given to Ripple Labs’ founders and 80 billion to the company itself, he alleges that the defendants “earned massive profits by quietly selling off this XRP to the general public,” adding:
From 2013 to the present, [the] defendants have been engaged in an ongoing scheme to sell XRP to the general public in a never ending
