An amendment to the old lawsuit was submitted against Ripple on August 5. The initial filing states that XRP works as a security not registered as one and that Ripple has been selling these, basically, illegal assets.
The lawsuit was initiated by crypto investors from Compound Finance, a company dealing with crypto loans, in 2018.
SEC’s stance on digital securities
As reported by CoinDesk, in the updated legal claim initiated against Ripple about a week ago, the SEC-issued guidance on classifying certain type of virtual coins as securities was referred to.
Thus, the new charges against Ripple support the ones made earlier. They state that the crypto firm led by Brad Garlinghouse has been luring investors into buying XRP which is assumingly a security not registered as one.
Apart from the SEC guidance, the amended complaint refers to several other laws to do with crypto asset regulation.
Now, Ripple has to provide an official statement on the issue until September 19.
The legal case going since mid-2018
The situation goes back to May 2018, when investors pressed charges against Ripple, its chief and several top executives. The complainant stated back then that XRP, which is sold by Ripple every now and then, has everything to be treated as a virtual security.
Soon after that, several other investors also initiated a legal suit targeted at Ripple for a similar reason. All of those complaints have been combined and transferred to the federal court. The suit has not been qualified to be a class action, though.
Besides, the amended claim intends to link XRP back to Ripple Labs, even though, the latter officially insists that Ripple is not the emitter of XRP and has no connections to the XRP blockchain.