On 7th August, a global investor law firm, Rosen Law Firm issued a press release stating that it is investigating Ripple Labs, Inc. and XRP. The firm confirmed that it is inspecting to see if Ripple has violated any federal security laws in association with the sale of XRP tokens. According to reports, Rosen Law Firm is preparing a class action lawsuit, attempting to reclaim damages suffered by investors in XRP tokens.
On June 27, another private XRP investor accused the CEO, Bradley Garlinghouse, and Ripple Labs Inc. of illegally profiting from the increase in the value of the XRP token. Previously, on May 3rd, Taylor-Copeland law, one of the first law firms in California had filed a class action lawsuit against Ripple Labs.
According to reports, the lawsuit targeted Ripple, its wholly owned ancillary XRP II, and Brad Garlinghouse, for the sale of unlisted securities. The firm alleged that Ripple’s sale of the tokens is a violation of U.S. federal securities laws.
Another lawsuit was filed by a Californian resident, David Oconer, in the Superior Court of California, San Mateo County, concerning Ripple and XRP claiming that the company created the XRP token and then used sales of the tokens in order to fund its operations and the development of the XRP ecosystem.
As stated by CNN, the complaint read:
“Ripple’s public commitment to limit the supply of XRP had its intended effect. In the weeks that followed, the price of XRP rapidly increased, from approximately $0.22 per token on December 7, 2017 to $3.38 per token on January 7, 2018,”
Moreover, Oconer claimed that the company had complete hold over the XRP ledger and that the network is not decentralized like Bitcoin or Ethereum.
While these claims of the XRP Ledger being controlled by Ripple have been debunked, many still believe that Ripple is in control of the currency itself. Moreover, Ripple does not utilize the funds gained from the sale of XRP in the secondary market, which removes it from the definition of being a security.