Ripple Labs, the firm behind the Ripple payment protocol and XRP-based products, is facing another lawsuit that accuses the company of violating U.S. securities laws.
On Monday, Florida-based XRP investor Tyler Toomey has filed a civil suit against Ripple Labs and Ripple CEO Brad Garlinghouse. The lawsuit alleges that the defendants failed to comply with Florida securities laws because he was not registered with the Florida Office of Financial Regulation.
Toomey pointed out that Ripple Labs and Garlinghouse were already facing a similar lawsuit for alleged violation federal securities laws. The $1.35 billion lawsuit was filed by the U.S. Securities and Exchange Commission on December 22, 2020.
The new class-action lawsuit alleges that Ripple sold millions of dollars in unlicensed XRP tokens and generated considerable revenues from those sales, stating: "The overwhelming majority of Ripple's revenue came from its sales of XRP (over $1 billion), and Ripple relied on those sales to fund its operations."
The plaintiff also claimed that Ripple misrepresented XRP, claiming that the token should not be classified as a security. Toomey argued that the defendants knew that XRP was indeed security:
“Defendants made false statements and/or omissions regarding material facts related to the true nature of XRP. Specifically, Defendants knew that XRP was in fact a security, but affirmatively misrepresented to investors that it was not a security. Defendants knew XRP was security before Defendants sold XRP into the market."
In accordance with federal Civil Procedure rules, Toomey has asked a trial by jury to try all the issues involved in the lawsuit.
Soon after the SEC took action against Ripple in late 2020, numerous crypto firms including Coinbase and Binance.US delisted XRP from their platforms. The large-scale delistings obviously affected the XRP market. On January 15, Polkadot's DOT market cap surpassed XRP, and XRP has fallen by over 2% in the past 24 hours. At the time of issuance, the trading price of the XRP is $0.26.