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On June 27, an investor filed an action in the United States against Ripple Labs, the company in charge of the development of XRP crypto-active and its blockchain, pointing out that the company has violated securities legislation and has executed market manipulation strategies to profit from the commercialization of cryptoactive.
On this occasion, David Oconer, who is billed as an XRP investor in media such as The Next Web, is the plaintiff of Ripple Labs and its CEO, Bradly Garlinghouse. In the document filed in the California Superior Court, in San Mateo County, the main charge against Ripple is the violation of California laws, since this company sells cryptoactives that could to be considered financial securities without the authorization required for this activity
According to the Howey Test a test that defines whether a transaction involves the transfer of financial securities, When you buy a property or asset from which you intend to make profits based on the effort of a third party, you acquire a value. To trade with this type of instruments, a special license is required in the United States, which does not have a Ripple Labs, therefore, in the event that it is shown that the XRP, cryptoactive native of the United States. Ripple ecosystem, is worth,
In this point, enter the claims of market manipulation, since, as presented by the plaintiff, Ripple uses his control over the marketing of the XRP to manipulate the value of the cryptoactive while the profits generated are used for the maintenance and improvement of the company and the XRP ecosystem.
To defend this charge, the document alleges that Ripple, after producing all of its cryptoactives (XRP 100 billion) withheld at 80% to sell at your convenience and employ strategies that allowed the company to do so. Company and its founders (creditors of the remaining 20%) to influence
One of the facts cited for defending this point was what happened in May 2017, when Ripple announced that it was not the case. it would have 55 million XRP out of the 61 million that they still had in its power, to place them in a sort of trust that would only allow a limited time to market from time to time.
This action by the company resulted in an increase of more than 1,000% in the price of the product. XRP in the second quarter of this year
In May 2017, the price of XRP increased after announcements by Ripple about the new method of marketing this cryptoactive. Source: https://coinmarketcap.com/currencies/ripple/
In 2018, this is the second application that Ripple receives for violating laws regarding the unregistered sale of securities in California, United States. Earlier in May, Ryan Coffey filed a complaint with similar charges. In common between the two documents are noted on the issue of the 100 billion XRP, which are not mined as in blockchains that demonstrate a greater degree of decentralization, such as Bitcoin and Ethereum, as well as on sales, qualified as " an ICO that never ends. "
Featured image by BoonritP / stock.adobe.com
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