The legal battle between Ripple and investors continues to poodle ahead. The latest development is a filing by the San Francisco-headquartered blockchain payments firm asking the court to dismiss the fraud charges put forward by the plaintiff on the account of lack of evidence to support the said claims.
Ripple’s legal team filed documents with the court on Monday, citing that the plaintiff failed to provide any proof to support the claims that Ripple committed fraud. The team noted that the amended complaint filed sometime in March failed to establish that the alleged misrepresentations were false.
“By and large, the Court reasoned that Plaintiff failed to ‘explain how or why’ the alleged misrepresentations were actually false. Plaintiff’s Consolidated First Amended Complaint (“FAC”) attempts to resuscitate these claims, but fails because Plaintiff still has not alleged with particularity ‘how’ and ‘why the alleged misrepresentations are false. Plaintiff’s Fraud Claims should again be dismissed, this time with prejudice.”
The filing also includes the argument that the plaintiff failed to satisfy the Federal Rule of Civil Procedure 9(b) of the U.S. Law by not providing a more detailed account of the events constituting the fraud allegations.
“Rule 9(b) requires plaintiffs alleging fraud to “state with particularity the circumstances constituting fraud…A plaintiff who successfully identifies the “who, what, when, where, and how” of a statement, without more, has not satisfied Rule 9(b). Where a plaintiff fails to explain how and why an alleged statement is false, the averments of fraud are insufficiently pled and must be disregarded.”
Ripple And Brad Garlinghouse Have Been Named In Multiple Class-Action Lawsuits
Ripple has been confronted with several lawsuits over the years centered around the security status of its XRP cryptocurrency. Two of the suits against the company were combined into one late last month.
One of these lawsuits led by investor Bradley Sostack filed an amended complaint a few months ago on the court’s recommendation. According to the complaint, Ripple CEO Brad Garlinghouse sold his XRP holdings despite promising to HODL for a really long time. Sostack claimed that Garlinghouse sold around 67 million XRP in 2017 in exchange for other cryptocurrencies and also dollars. This, according to the complaint, misled investors who were paying keen attention to Garlinghouse’s words.
Yet in the new motion filed by Ripple, the firm maintains that the “plaintiff fails to plead what percentage of his personal balance sheet the alleged sales constitute.”
Additionally, Ripple’s legal team explains that Garlinghouse selling his XRP tokens does not mean he was not resolutely bullish about its future:
“Selling a portion of one’s XRP holdings does not mean that the seller cannot also be ‘very, very long’ in the same asset as a percentage of his or her own personal balance sheet. By way of example, a wine collector who amasses a vast collection of fine wines can be said to be ‘long’ on wine as a percentage of her net worth – that does not change if the collector decides to sell a few (or even many) bottles.”
At most, class-action lawsuits against Ripple and its execs could affect whether XRP is deemed a security. This will subsequently influence whether investors, exchanges, and potential partners think it is pretty risky to have any dealings with the digital asset.
Ripple is now asking the court to dismiss the fraud allegations with prejudice, meaning that the case will be dropped permanently and the plaintiff cannot take the company back to court. Whether the judge rules in Ripple’s favor or not is anyone’s guess.
