In a recent update on an XRP case, Ripple CEO Brad Garlinghouse has been accused of misleading statements in 2017. In her decision, US Federal Judge Phillis Hamilton decided to allow a securities class action lawsuit against the company.
The lawsuit alleges that Garlinghouse violated California securities laws. It will be up to a jury to decide whether Garlinghouse made misleading statements during an interview in 2017. Ripple is facing four charges related to the failure to register XRP as a security.
The crux of the case revolves around a statement made by the CEO in an interview with BNN Bloomberg Canada in 2017, where Garlinghouse claimed to be “very, very long” on XRP. However, the lawsuit argues that the statement was false as the executive had sold millions of XRP throughout the year.
In its defense, Ripple argued that the “misstatement” claim should be dismissed, citing Judge Analisa Torres’ decision in the SEC vs Ripple case last year, which declared that XRP is not a security under the Howey Test. However, Judge Phillis Hamilton disagreed with the claim, emphasizing that Ripple’s native token could be a security when sold to non-institutional investors.
As part of the process, Hamilton stated, “The court declines, as a matter of law, to consider that a reasonable investor would have derived any profit expectation from general trends in the cryptocurrency market, as opposed to Ripple’s efforts to facilitate the use of XRP in cross-border payments, among other things.”
At the time of publication, the XRP price was quoted at $0.4889, representing a 1.2% increase in the last 24 hours.
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