- Ripple is facing new accusations in its ongoing XRP securities lawsuit filed by a former investor.
- The payments firm is now accused of engaging in false advertising under Californian law.
The ongoing class-action lawsuit against Ripple now includes two more accusations. In 2018, former XRP investor Bradley Sostack filed a lawsuit accusing Ripple of selling XRP illegally as an unregistered security, violating US securities law. A recent amendment submitted claims that Ripple also engaged in false advertising under California law.
Lead Plaintiff brings this sixth claim for relief for false advertising in violation of California Business and Professions Code Section 17500 under the alternative theory that XRP is not a security.
Defendants operate a business where they intended to, and did, sell XRP to members of the general public, including Lead Plaintiff. Defendants cause to be made or disseminated through California and the United States through advertising, marketing and other publications, statements that were untrue or misleading, and which were known, or which by the exercise of reasonable care should have been known to Defendants, to be untrue and misleading to consumers and Lead Plaintiff.
According to the lawsuit claims, misleading advertising from Ripple includes statements regarding the genesis of XRP, the circulating supply of XRP and the adoption of XRP. Recent adjustments to the lawsuit also accuse Ripple CEO Brad Garlinghouse of selling 67,000,000 XRP while publicly stating he was holding the digital asset for long-term gains.
Ripple had earlier responded that XRP is an independent asset and not a security because investors are not shareholders in the firm. As the company’s request to dismiss the lawsuit was denied, it will be proceeding to trial.
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