Ripple Hit With Another Class-Action Lawsuit Over Securities Law Violations

Tyler Toomey, a Florida resident, has alleged in a class-action lawsuit that Ripple had illegally sold XRP in the US state. It comes a month after the US SEC filed its own lawsuit against the payments processor.

January 27, 2021 | AtoZ Markets – A Florida resident has filed a class-action lawsuit against Ripple Labs and the company’s CEO, Brad Garlinghouse, in which he accused them of violating state securities laws and illegal enrichment.

Toomey Takes on Ripple After Losing $50 XRP Investment

According to Tyler Toomey, the defendants knew the XRP token was a security, but misled investors with false claims.

The plaintiff noted that Ripple did not register with the Florida Financial Regulatory Authority prior to selling the token to state residents. Toomey believes the sales were “millions of dollars” and the defendants made illegal profits.

Toomey acquired 135 XRP in November 2020 for $97.80. In December, Toomey sold the tokens in two batches, taking a loss of $48.56, or nearly 50%.

The investor seeks compensation for damages and legal costs, the imposition of appropriate fines, and a ban on further activities if the defendants are found guilty of violating the rules listed in the lawsuit.

In accordance with federal rules of civil procedure, Toomey demanded a jury trial on all matters related to the lawsuit.

Ripple Hit by Another Lawsuit on Top of SEC Legal Battles

As a reminder, on December 22, the US Securities and Exchange Commission (SEC) accused Ripple of selling unregistered securities in the form of XRP in the amount of $1.3 billion. Preliminary hearings will be held on February 22, 2021.

Read also: UK Treasury Classifies XRP as Exchange Token & Not a Security

In January, Tetragon Financial Group filed a lawsuit against the California-based company, which led to a $200 million Series C funding round in 2019.

For the second year now, investors accuse the XRP issuer of violating securities laws. However, despite these challenges, Ripple had a milestone year according to the CEO. Ripple experienced increased customer growth and traction in key markets and saw incredible innovation from developers in the XRP community.

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