Ripple Labs achieved a significant procedural victory in the ongoing class action lawsuit at the US District Court for the Northern District of California. A federal judge in Oakland has granted the company’s motion for summary judgment on both federal and state class claims regarding allegations of unregistered securities. This win effectively ends the class action at the district court level, though some critical questions remain unanswered.
Ripple Scores Big Win
Central to the case was whether Ripple’s native cryptocurrency, XRP, should be classified as a security. The court determined that this issue depends on whether XRP meets all three prongs of the Howey test. This decision needs to be made by a jury. This specific claim, brought by a single plaintiff, is set to go to trial.
However, given the minimal damages involved and the possibility of an unfavorable jury verdict for the plaintiff, a settlement is likely.
This ruling underscores a significant uncertainty in the current regulatory landscape for cryptocurrencies. “The court’s decision illustrates the urgent need for clear federal legislation,” noted a legal expert. “We could face a scenario where XRP is deemed a security in California but not in New York, leading to a fragmented regulatory environment.”
Stuart Alderoty, Ripple’s Chief Legal Officer, highlighted the victory in a post, emphasizing that the judge dismissed all allegations of Ripple violating federal securities law. He affirmed that the New York ruling, which states XRP is not a security, remains intact.
Alderoty also addressed the remaining state law claim, tied to a 2017 statement. The plaintiff, who did not purchase XRP directly from Ripple and may not have been influenced by the statement, allegedly lost only a few hundred dollars. “We look forward to that cross-examination,” Alderoty stated, expressing confidence in Ripple’s position.
What’s More?
A staggering 250 million XRP were moved from a Ripple wallet to an undisclosed destination, as reported by Whale Alert. The recipient address, “rP4X2,” originally activated last October with a transfer of 70 million XRP, now holds nearly 270.96 million tokens. Speculation abounds as to the recipient’s identity, with theories suggesting it could belong to Ripple despite its initial activation by an unknown source.
XRP is trading at an average price of $0.483 at press time. Its 24-hour trading volume is down by 3%, standing at $1.05 billion.
Not a financial advice.