Ripple Is Facing More Legal Trouble
The crypto firm is currently facing another class-action lawsuit from the likes of Bitcoin Manipulation Abatement LLC. The case was filed on May 1 in a U.S. federal district court against both Ripple and its CEO Brad Garlinghouse. Documents pertaining to the case alleged that Garlinghouse and his team raised billions of dollars in funds through an initial coin offering (ICO) that was never properly registered with the appropriate governing body. The company thus alleges fraud in that Ripple was not entirely honest or forthcoming with investing parties.
Court documents officially state:
In order to drive demand for and thereby increase profits from the sale of XRP, defendants have made a litany of false and misleading statements regarding XRP in violation of California’s securities laws, and false advertising and unfair competition laws. Defendants have since earned massive profits by selling off XRP to the public, in numerous offerings, having sold $1.1 billion in XRP to retail customers in exchange for legal tender cryptocurrencies.
Ripple is ultimately swelling with lawsuits at the time of writing, some of which are against it, and some of which stem from it. Another class-action suit pending against Ripple comes from several early investors, who claim that the company defrauded them and provided them with false information. The company, the suit says, failed to register XRP as a security, and now many initial investors are demanding their money back.
The documents of that case ultimately describe Ripple as an “ongoing token sale.”
However, Ripple is also involved in a third lawsuit. This one was filed by the company against popular video-streaming platform YouTube, which it alleges has failed repeatedly to take down or remove any fraudulent accounts that seek to profit through Ripple. Many of these accounts put out fake giveaways, which claim that all customers willing to send in their crypto will likely receive huge returns. Many people have lost money by listening to these scams, while those involved in the fraud have made off with hundreds of thousands of dollars.
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The lawsuit also alleges that YouTube, itself, has garnered heavy monetary gains from these scams. It has also failed to perform the necessary background checks on fraudulent channels.
Bitcoin Manipulation Abatement – which filed the latest lawsuit against Ripple – is also involved in a second suit against derivatives exchange FTX. The company states that FTX is responsible for manipulating bitcoin’s price and negatively influencing Binance, arguably the largest and most popular cryptocurrency exchange in the world in terms of daily trading volume. The suit is for $150 million.