Ripple, the cryptocurrency firm behind the XRP token, has requested a federal court dismissal of a class-action lawsuit; all while ignoring one major issue, XRP’s security status.
The original lawsuit was first launched back in early 2018, by a handful of disgruntled XRP investors. The plaintiffs claimed that Ripple violated securities laws during the initial offering of the token; stating that XRP was intrinsic to Ripple’s operational integrity.
The relationship between XRP and Ripple has been a mostly grey area. This association has been put to the test in federal court for most of 2018, and now, well into 2019.
Too Little Too Late
Today, Ripple filed the motion to dismiss, with the firm basing the dissolution of the lawsuit on the basis that the plaintiff, Bradley Sostack, delayed in filing the suit. The company states that Sostack should have voiced his concerns back in 2013 after the cryptocurrency’s initial coin offering (ICO); rather than 2018, when the lawsuit claims were brought forward. Ripple’s lawyers cite a three-year statute of repose, which under the securities act, limits liability claims to a three year period within which to file. This statute is highlighted within Ripple’s motion to dismiss :
“Under Plaintiff’s own allegations, Defendants offered XRP to the public throughout 2013 through 2015. Accordingly, the three-year statute of repose expired as of 2016 (three years after the sales cited in the May 2015 settlement) and in no case later than May 2018 (three years after the May 2015 settlement agreement in which ‘Defendants acknowledged that they had sold XRP to the general public,’ Complaint ¶ 25). The Securities Act claims in the Complaint, filed August 5, 2019, are therefore untimely and barred by the statute of repose.”
The proposal also indicates Sostack’s jurisdiction in filing the claim, noting that it was listed under Califonia state law, not federal securities law, and therefore should be disregarded.
Is XRP a Security?