Ripple will get the chance to prove at a federal level that XRP shouldn’t be classified as a security. In a recent development, a judge has granted their motion to keep a class action lawsuit against them in Federal Court, confirmed via a tweet on March 1, 2019.
In May 2018, a lawsuit was lanced against Ripple Labs, its subsidiary XRP II, and Ripple CEO Brad Garlinghouse for the alleged sale of an unregistered security.
The Taylor-Copeland law firm initiated the case, and according to a March 1, 2019 tweet by lawyer Jake Chervinsky, the case has been ordered to remain in federal court.
The plaintiffs will file an Amended Consolidated Complaint by March 30,” the tweet revealed.
The History of the Case
The case was first brought forward in 2018 by the Taylor-Copeland law firm which represented a man named Ryan Coffey. According to them, Coffey purchased 650 XRP tokens on January 5, 2018, and then sold them on January 18, 2018, for USD and made a loss of $551.89, which was 32 percent of the initial price.
The case is now a class action lawsuit, and it claims that the company violated the Securities Act and the California Corporations Code, and the plaintiff is seeking reimbursement for attorney fees, the cost of the suit, punitive damages and also wants XRP to be declared an unregistered security by the court.
Since the suit was filed, Ripple’s legal team has taken full advantage of its potential, and in November 2018, they filed a motion to have the case go to federal court. With this new ruling, they are a step closer to their goal.
“Because interstate class actions typically involve more people, more money, and more interstate commerce ramifications than any other type of lawsuit, the Committee firmly believes that such cases properly belong in federal court,” the official document says.
Now, both parties have 14 days to meet to determine how litigation proceedings will occur. Should a 30 day period elapse, the plaintiffs will file a motion to revise the initial complaint.
This case could be a landmark one as it will give Ripple the opportunity to prove that XRP is not a security under U.S. law. This draws some similarities to the ongoing case with Kik and the Securities and Exchange Commission (SEC).