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XRP Holders Win Right to Sue Ripple, Legal Experts Unveil Implications

Wed, 07/05/2023 - 11:54
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Gamza Khanzadaev
Court ruling empowers XRP investors to sue Ripple, legal experts weigh in
XRP Holders Win Right to Sue Ripple, Legal Experts Unveil Implications
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In a significant development, the U.S. District Court in California has granted XRP investors the right to proceed with their lawsuit against Ripple, alleging the sale of unregistered securities. The court's decision, made on June 30, has allowed an investor class to proceed with their claims against the company, CEO Brad Garlinghouse, and subsidiary XRP II, reports Bloomberg Law.

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The case, known as Zakinov v. Ripple Labs, revolves around allegations that Ripple conducted a scheme to raise hundreds of millions of dollars by selling XRP to retail investors. Judge Hamilton of the US District Court for the Northern District of California certified the investor class, finding that they met the necessary requirements for certification.

Ripple had challenged the certification, arguing that the plaintiffs failed to adequately protect the interests of the class. However, the court determined that the merits of whether XRP is a security will be consistent for all class members. Any disagreements among potential class members over the premise of the lawsuit can be addressed through the standard opt-out procedure.

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Legal experts have started to weigh in on the implications of this decision. Jeremy Hogan, an attorney and digital assets enthusiast, pointed out that class certification does not directly impact the ongoing SEC case against Ripple. However, he expressed curiosity about how the SEC case might influence the class action.

Furthermore, attorney Bill Morgan raised the prospect of disparate findings regarding whether Ripple sold or offered securities. Morgan noted the complex nature of the issue and the potential influence of previous judgments.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.