As Ripple’s XRP Drops, Legal Trouble Builds
Ripple’s cryptocurrency, XRP, has dropped by about 90 percent from a high of $3.84 per token in January of this year to $0.29 today. When XRP hit its high of $3.84, Ripple co-founder Chris Larsen briefly became one of the richest men in the world because of his sizable ownership of the currency, his share then worth about $59.9 billion. But that status was short-lived, along with Ripple’s upward trajectory.
Of course, the decline of XRP is not unique in the world of cryptocurrency. Bitcoin has also had a dramatic decline in value throughout 2018.
Along with the decline in value of the XRP coin, Ripple has been plagued with lawsuits.
In May, XRP investor Ryan Coffey sued Ripple Labs and its CEO Brad Garlinghouse in a class action suit for allegedly engaging in the sale of unregistered securities. The company and Garlinghouse was said to have made at least $342.8 million through XRP sales that were created out of thin air.
In June, XPR investor Vladi Zakinov filed a class action lawsuit against the same defendants for the same thing. He alleged that the XRP token is a security controlled by Ripple.
And in July, XRP investor David Oconer sued Ripple Labs and Garlinghouse in a class action suit for essentially the same thing. Also in July, Plaintiff Avner Greenwald sued the defendants with similar charges.
The May lawsuit was transferred from state court to federal court by the defendants, Ripple and Garlinghouse. Plaintiff Coffey appealed this, but on August 10th, a California judge denied Coffey’s appeal and said that the case will remain in federal court.
This is advantageous for the defendants because it allows these similar class action lawsuits to be consolidated into one, according James Chareq, an attorney and partner at Hudson Cook who is very familiar with class action cases. Moving from state to federal court increases efficiency and reduces legal fees, he said.Last modified: August 15, 2018
Todd Stone is a reporter for deBanked.