Ripple was accused of defrauding investors and selling unregistered securities. Bitcoin Manipulation Abatement LLC filed a class-action lawsuit claiming that the blockchain startup and its chief Executive, brad Garlinghouse, raised over $1 billion by promoting and selling XRP.
“The defendants made numerous false statements about XRP in violation of California securities laws, unfair advertising, and competition,” the lawsuit States.
The plaintiff claims that the sole purpose of creating XRP is to enrich the founders of Ripple and related individuals. Now the company plans to recover from Ripple compensation for the losses of its customers and other payments provided for by law.
In early April, 11 major crypto companies, including the Binance, BitMEX, KuCoin exchanges, the tron and Block.one blockchain projects (the EOS Issuer) and others were accused of selling unregistered securities. All the class-action lawsuits went to the district court for the southern district of new York through one law firm, Roche Cyrulnik Freedman. Lawyers interviewed by RBC-Crypto explained that in the United States, class actions are a way of earning money and are often needed only for the conclusion of a settlement agreement.