In a recent update to an XRP-related lawsuit, Ripple CEO Brad Garlinghouse has been accused of making misleading statements in 2017. In her decision, US District Judge Phyllis Hamilton has allowed a securities class-action lawsuit against the company to proceed.
The lawsuit alleges that Garlinghouse violated California securities laws. It will now be up to a jury to determine whether Garlinghouse made misleading statements during an interview in 2017. Ripple is facing four charges related to the unregistered sale of XRP as a security.
The crux of the lawsuit revolves around a statement made by the CEO during an interview with BNN Bloomberg Canada in 2017, where Garlinghouse claimed to be “very, very long” on XRP. However, the lawsuit argues that this statement was false, as the executive had sold millions of XRP throughout the year.
In its defense, Ripple argued that the “misstatement” claim should be dismissed based on Judge Analisa Torres’ decision in the SEC vs. Ripple case last year, where she ruled that XRP is not a security under the Howey Test. However, Judge Phyllis Hamilton disagreed with this argument, emphasizing that Ripple’s native token could be considered a security when sold to non-institutional investors.
In a part of her ruling, Hamilton stated: “The court declines to hold, as a matter of law, that a reasonable investor would have derived any profit expectation from general cryptocurrency market trends, as opposed to Ripple’s efforts to facilitate the use of XRP in cross-border payments, among other things.”
At the time of publication, the price of XRP was quoted at $0.4889, reflecting a 1.2% increase in the last 24 hours.
Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute financial, investment, or other advice. Investing or trading in cryptocurrencies carries the risk of financial loss.
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