XRP: check the hypothesis that it is not a security
A new document presented as part of lawsuit against Ripple suggests that XRP may not be a title.
The document was filed by counsel for the principal applicant, the former investor XRP Bradley Sostack, on behalf of all the investors involved in the class action which accuses the Ripple company of having raised hundreds of millions of dollars through sales to private investors of an unregistered security, or XRP, then of violating the rules for titles with repeat sales of XRP in the market.
According to the document, the allegations have been readjusted with other allegations, including a sixth allegation of false advertising in violation of California commercial law, which adds an amendment drafted “according to the alternative theory that XRP is not a guarantee” .
There is also a seventh complaint accusing the company of unfair competition, still in violation of California law, still according to the theory that XRP is not a security.
These changes introduce in the specific case the alternative theory that Ripple did not issue and sell an unregistered security, contrary to what has always been argued by the complainants.
In addition, other changes have also been made regarding the alleged nature of XRP, such as Drive Tool Token Utility, since instead more than 60% of the XRP tokens are actually owned by the company, and it seems to have no other purpose today than to be sold in the future to raise other funds.
The document also mentions that the CEO of Ripple Brad Garlinghouse in 2017 he would have sold at least 67 million XRP on various exchanges, and that he sold all of the XRP tokens received by Ripple in the same year within a few days of receiving them.
On the other hand, the performance of the XRP price on the long-term market has been disappointing for at least two years, and the CEO himself explicitly confirmed that the company has to keep selling them to get up.
We do not know, however, why this hypothesis is explicitly introduced with this document. XRP is not a security, since much of the cause was based precisely on this assumption.
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