The Northern District Court of California rejected a class action lawsuit filed by investor Ryan Coffey against Ripple Labs Inc. on behalf of everyone who bought XRP (XRP/USD) tokens after January 1, 2013. The company was accused of illegally manipulating the price of XRP.
Coffey noted that Ripple Labs constantly injected media sensitivities, ignoring California's corporate code and neglect of security. In addition, the plaintiff accuses the head of Ripple Brad Garlinghouse of misleading investors, and the company regarding the insufficient decentralization of the XRP token. Coffey believes that Ripple might have violated several federal laws in the process of selling XRP tokens.
However, the court decision says that after careful examination of the papers submitted by the parties, consideration of their applications and legal powers, the court refuses the petition of the plaintiff. Most likely, Coffey will not appeal to the federal court, as this could create a precedent, ruling out the possibility of filing such suits in the courts of first instance.
WHY IS IT IMPORTANT?
1. Former chairman of the US Commodity Futures Trading Commission (CFTC) Gary Gensler also said in April that the currencies Ethereum and Ripple could be issued in violation of US securities legislation.
2. In July a XRP token holder sued Brad Garlinghouse in the California Supreme Court. David Oconer has stepped out to accuse the firm of manipulating XRP rates. The plaintiff believes that such machinations serve as definitive proof that XRP should be regulated as a security which means the company issuing it has violated U.S. federal laws when it released the tokens onto the open market.
3. In June, Vladik Zakinov addressed the California court complaining that Ripple hasn’t registered XRP before starting its sales, although the token is a company-controlled security by all indications.