Ripple keeps struggling against the legal action brought up in 2018, stating that XRP is allegedly nothing more than unregistered security. Now, Fortune magazine reports that the crypto giant has addressed a federal court with a plea to dismiss the class action lawsuit against it.
The charges against Ripple were pressed by unhappy investors last year who demanded compensation for unspecified damages.
This case is crucial since it may solve the ongoing issue regarding numerous crypto coins that may, in reality, turn digital securities rather than a brand new type of an asset and thus expose many DLT companies in a bad light.
Ripple says the legal suit is ‘expired’
When asking the court to drop the complaint, Ripple makes only a brief mention of XRP’s legal status, saying that the regulators have already examined XRP and found it to be a commodity, not security.
The company’s major argument is that the legal case was submitted too late. Ripple quotes a law that dismisses companies from any legal complaints in court after three years pass since the first token sale.
As per Ripple, the legal suit has to be dropped since the first XRP sale took place in 2013.
Buying XRP from secondary market does not count, says Ripple
Another argument from the Ripple’s legal team is that the investors who pressed charges initially purchased XRP from the secondary market and not directly from Ripple, the emitter.
Besides, citing Ripple’s legal documentation, Fortune says that since the lawsuit was initiated in California, the local consumer laws it is based on do not work when it comes to federal laws on securities.
Regulators voice their verdict on BTC, ETH, XRP
Recently, the major US regulator SEC stated that it does not consider the two major crypto coins, BTC and ETH, to be securities. As for XRP and other assets, the situation here remains unclear.
However, last month, British financial regulatory agencies said that XRP should not be considered a security.