Ripple Sued for Breaking Laws; Xrp Supporters Are Threatening With Countersuit

Recent claims that Ripple Labs Inc was breaking federal, as well as state laws when it comes to selling unregistered securities has led to a class action lawsuit against the company. The lawsuit was filed on May 3 in San Francisco's Superior Court by Ryan Coffey.

The lawsuit against Ripple Labs

A group of Ripple investors led by Ryan Coffey have filed a lawsuit against Ripple Labs in the Superior Court of California on May 3. The company, as well as its CEO, Bradley Garlinghouse, are accused of selling securities that are deemed unregistered to the public. According to Coffey, this is basically a never-ending ICO.

Tom Channick, the company’s spokesman, has stated in an email to Bloomberg that the company has seen the lawyer’s tweet regarding the lawsuit, but it has yet to be served.

Ripple Labs is both the creator and manager of the third largest crypto in the world, XRP. This is the same currency that Coffey claims is a security. He also claims that Ripple itself has recognized that its investors can expect a profit, and have even touted its price performance publicly, and on many occasions.

According to Coffey, Ripple Labs’ actions have damaged him, as well as other investors. Coffey himself has experienced a 32% loss after purchasing 650 XRP tokens back in January.

Ripple supporters threaten with a countersuit

Ripple has become a large and popular cryptocurrency, and its self-proclaimed army has gathered on Twitter to show its support. The group, led by Tiffany Hayden, commented on the lawyer’s tweet about filling of the lawsuit.

Hayden stated that anyone could try and sue the company, but she hoped that Ripple would file a countersuit. Since this kind of lawsuit is certain to damage XRP’s price and reputation, Hayden believes that the company should countersue to make up for its potential losses. She even brought up the idea of XRP holders launching their own class action suit against the group of investors who decided to sue Ripple Labs.

She also posted a separate tweet in which she criticized Coffey, and said that his actions are damaging other investors as well as Ripple Labs. According to her, Coffey is only doing it because he bought XRP tokens and it did not immediately pay off.

There were even speculations that this lawsuit is just an excuse to force the SEC to reconsider the nature of XRP and influence its decision towards seeing it as a security. This came as a response to pressure by the Security and Exchange Commission and Commodity Futures Trading Commissions, who both asked whether XRP and ETH should be seen as securities.

When it comes to the future of XRP’s price, and whether or not it will drop due to the lawsuit, all we can do is wait and see.

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