The plaintiff paid USD 400 for administrative expenses to initiate the legal action. He believes that Ripple should register XRP as a security with the SEC.
Ripple, the company that issues the XRP cryptocurrency, and Brad Garlinghouse, its founder, recently received a lawsuit from US investor Tyler Toomey. The plaintiff is demanding USD 5 billion in compensation after having lost USD 48 due to the recent drop in the price of the crypto asset.
Tomeey acquired 135 XRP at USD 0.72 per unit, equivalent to around USD 97, last November. The US Securities and Exchange Commission (SEC) filed the lawsuit against Ripple in December. After that, the price of the crypto asset decreased, so the trader had to sell its holdings for USD 49.
Since he lost USD 48, almost half of his investment, he decided to take legal action against the company. He filed a class-action lawsuit, that is, on his behalf “and on the behalf of others who are in a similar situation.” For administrative expenses for the litigation, Toomey had to pay USD 402, which considerably exceeds his investment in XRP.
In line with the SEC’s lawsuit, Toomey argues that Florida investors did not know XRP well enough before risking their money. According to the plaintiff, this would not have happened “if the defendants had complied with the requirements of the law.”
According to the SEC’s complaint, Ripple had raised at least USD 1.3 billion since 2013 by selling XRP as a digital currency. The regulatory agency says that this is a crime as they consider that this asset is unregistered security. They also accuse Larsen and Garlinghouse of making unrecorded personal sales of the alleged security for a total of USD 600 million.
At this time, the litigation that the investor initiated on January 25th is in progress, according to the usual procedures. The person in charge of the judicial process is Magistrate Joel B. Toomey, who curiously has the same last name as the plaintiff. That has raised suspicions among the members of the XRP investment community since both parties could have family ties.
An Attorney Suggested Blaming the Congress and the SEC
Attorney Jesse Hynes, who knows the legal aspects of Bitcoin (BTC) and other cryptocurrencies, expressed his views on the case. “These things are going to keep happening, so you can blame the Congress and the SEC for it,” he said.
The lawyer, who is in favor of the development of the cryptocurrency industry, criticized Senator Maxine Waters. The official showed her opposition to the advancement of this type of technology in a letter that she recently sent to President Biden.
She suggests that he should dismiss the OCC’s order allowing banks to use non-permissioned stablecoins and blockchains. The US regulator authorized federal financial institutions to use new technologies, such as blockchain networks and stablecoins to facilitate payments.
By Alexander Salazar
