Key Takeaways:
- A California federal court has allowed a civil securities lawsuit against Ripple Labs to proceed, rejecting their summary judgment request.
- The case revolves around allegations that Ripple CEO Brad Garlinghouse made misleading statements in 2017 about his XRP holdings while selling millions of XRP.
- The court dismissed claims about Ripple’s failure to register XRP as a security, but a jury will decide if Garlinghouse’s statements were misleading.
A federal court in California has allowed a civil securities lawsuit against Ripple Labs to proceed, rejecting the company’s request for summary judgment.
The case focuses on allegations that Ripple CEO Brad Garlinghouse made misleading statements during a 2017 interview, claiming he was “very, very long” on XRP while allegedly selling millions of XRP that year.
UPDATE: US FEDERAL COURT GREENLIGHTS SECURITIES LAWSUIT AGAINST RIPPLE LABS, ACCUSING CEO OF BREAKING CALIFORNIA SECURITIES LAWS
— BSCN Headlines (@BSCNheadlines) June 21, 2024
The court dismissed claims related to Ripple’s failure to register XRP as a security.
Judge Phyllis Hamilton ruled that a jury should determine if Garlinghouse’s statements were misleading, though Ripple argued XRP is not a security based on a 2023 ruling in another case.
A #federal court judge in #California has allowed a securities lawsuit against #Ripple Labs to proceed, centered on allegations that CEO Brad #Garlinghouse made misleading statements about #XRP's status as a security in a 2017 interview.
— TOBTC (@_TOBTC) June 21, 2024
The decision disregarded Ripple's bid to… pic.twitter.com/af9eejPmX8
The court found that XRP could be seen as a security for non-institutional investors expecting profits from Ripple’s efforts.
Ripple’s legal officer, Stu Alderoty, emphasized that most class action claims were dismissed and only one state law claim remains.
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