Ripple CEO Faces Legal Action Due to Allegedly Misleading Statements in 2017 Interview
Ripple CEO– Ripple Labs, the blockchain company known for its XRP tokens, is facing yet another legal challenge. A civil securities lawsuit against its CEO, Brad Garlinghouse, has been given the green light by a California federal court judge.
The lawsuit revolves around allegations that Garlinghouse made misleading statements during a 2017 interview. In that interview with Canada’s BNN Bloomberg, Garlinghouse had mentioned being very, very long on XRP. However, plaintiffs argue that this statement was deceptive because Garlinghouse allegedly sold millions of XRP tokens the same year.
Judge Phyllis Hamilton dismissed four claims last year, including accusations that Ripple failed to register XRP as a security. However, the judge allowed the case regarding Garlinghouse’s alleged misleading statements to proceed to trial, where a jury will now hear the arguments.
This latest development adds to Ripple’s ongoing legal battles concerning the regulatory status and disclosures related to its cryptocurrency, XRP.
Legal Proceedings Commence Against Ripple CEO for Allegedly Misleading Statements in 2017 Interview
In July 2023, a federal court in New York determined that the trading of XRP on exchanges and via algorithms did not breach U.S. securities laws, but sales to institutional entities did.
In the California lawsuit, Ripple’s legal team contended that the claims of deceptive statements should be dismissed, asserting that XRP does not meet the definition of a security under the Howey test. They also referenced the New York court’s ruling to support their position.
However, Judge Hamilton pointed out that XRP could potentially be classified as a security when sold to non-institutional investors, who might reasonably expect to profit from Ripple’s activities.
FAQs
What allegedly misleading statements did Ripple CEO make during the 2017 interview?
During a 2017 interview with Canada’s BNN Bloomberg, Brad Garlinghouse stated that he was “very long” on XRP. However, plaintiffs argue that this statement was misleading because Garlinghouse reportedly sold millions of XRP tokens that same year.
What are the claims in this lawsuit and what legal stages have been passed?
The lawsuit alleges that Brad Garlinghouse made misleading statements about XRP’s prospects, which misled investors. The legal proceedings have passed initial stages, with a California federal court allowing the case to proceed to trial. The court rejected Ripple’s motion to dismiss the allegations, highlighting potential misleading conduct.
For the latest in crypto updates, keep tabs on Crypto Data Space.
Leave a comment