A class-action lawsuit has been filed against Ripple and CEO Brad Garlinghouse for an unlicensed offering of securities both within the USA and the state of California. Although this is not Ripple’s only legal trouble, a securities violation could be the achilles heel of Ripple and the cryptocurrency space in general. Here are 4 things that every investor should know about this:
- Class-action = Judgement day pushed forward – the SEC has already been explicit in their belief that almost all ICOs and coins are securities. Andreeson Horowitz and other crypto investors have even been pleading with the government to exempt Ethereum (and it’s offerings) from security status. A bank token like Ripple could hardly pass anything close to the Howey Test. This lawsuit, as you’ll come to find, doesn’t need to be big to pack a big punch with higher courts potentially having to weigh in.
- The Lawsuit Plaintiff lost $500 – This is a tiny case! The investor purchased shares at $2.60, and sold at a loss a short period after, resulting in a $551 loss.
- Law Firm is very New- The law firm behind the suit is brand new, and so is the lawyer in it. The attorney, according to a Linkedin Page, the attorney has been practicing law for less than 5 years.
- This can infect the Market – With a dirty word like security being thrown around, this doesn’t mean anything good. The US market has still not set rules, and the times before it are unpredictable. All investors should be prepared for extreme volatility.
This suit is still very new, and details are emerging. We are recommending to all of our subscribers to take extreme caution, as there could be some bumpy roads ahead. follow us all at Cryptoleaks4all on Twitter for news and updates.