Ripple is to be represented by two former Securities and Exchange Commission (SEC) officials — one a former SEC Chair — in the US cryptocurrency’s ongoing private lawsuit.
In Ripple’s defense, ex-SEC Chair Mary Jo White and Enforcement Chief Andrew Ceresney — now lawyers at Debevise & Plimpton — will stand in to disclaim Ripple’s status as a security.
Presumably, a welcomed boost of confidence for the Ripple Labs team, White and Ceresney’s addition comes as the case heats up — having moved from the San Francisco Superior Court to the United States District Court for the Northern District of California.
What’s the Lawsuit?
Having lost $551 trading Ripple (XRP), Ryan Coffey and his team at Taylor-Copeland Law filed a class action lawsuit claiming the cryptocurrency should be registered as a security — and that its current status as unregistered is unlawful.
Taylor-Copeland Law files suit against Ripple on behalf of XRP investors. Read the full complaint here: https://t.co/feY5HWNaYx
— James (@TCryptoLaw) May 4, 2018
Arguing the US company had breached securities laws on federal and state levels, Coffey is seeking all damages to be repaid — not only to himself but to all that have suffered losses of XRP.
The lengthy complaint alleges a number of ways Ripple Labs’ token constitutes a security:
In order to increase demand for XRP, and thereby increase profits it can derive by selling XRP, Ripple Labs has consistently portrayed XRP as a good investment, relayed optimistic price predictions, and conflated Ripple Labs’ enterprise customers with usage of XRP.
Ripple vs SEC?
As the SEC deliberates over the legal status of cryptocurrencies, Ripple’s appointment of White — the 31st Chair of the SEC — would appear to send a clear statement of intent. That said, any confidence may be short-lived.
While Ethereum has to date been exempted from action by the SEC, Ripple may face more intense scrutiny — should Coffey’s argument take hold. According to Coffey, Ripple cannot be compared with Ethereum and Bitcoin — which were not “created out of thin air” prior to the distribution like XRP.
Cover Photo by Jomar on Unsplash
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