Ripple CEO Brad Garlinghouse will have to defend his position as a legitimate XRP seller. Per Bradley Sostack, a former XRP investor and the lead plaintiff in the case against Brad, Garlinghouse used unlawful techniques to sell XRP.
Former XRP investor Bradley Sostack claims that Ripple CEO Brad Garlinghouse was selling the XRP tokens as unregistered securities. The class-action lawsuit is seeing the hearings again because the investor refiled it recently. It features a scheme that allowed Ripple to raise millions in pure profits thanks to retail investments.
Per the court document filed on March 25, this is the sixth claim for relief. The plaintiff notes that the XRP token was named as top asset in promo campaigns. However, there is an alternative theory that claims XRP may not be a security. This is an attempt to insert alternative theory in the hearings in case the Judge will say that Ripple’s Brad Garlinghouse did not issue or sell the unregistered security offering.
There is one additional case on the Judge’s table indicating that Ripple was spreading XRP in violation of California law. The claim asserts that XRP is not security too.
Garlinghouse Dumped a Ton of XRP, Lawsuit Claims Again
The U.S. District Judge Phyllis Hamilton in the Northern District of California issued an order in February. Per the order, the lawsuit can proceed to trial, but the plaintiffs should refill the documents after adding some new information and deleting the unnecessary.
The lawsuit is not as tiny as it was two years ago, and Sostack managed to gather some proves for his theory. He claims that Ripple is very centralized and has no inner value, except for wildcat one:
“However, as discussed above, more than 60 percent of XRP is owned by Ripple and none of that XRP is used for anything at all, other than to be sold in the future to invest”
Per the claims, Garlinghouse saw investors demand in the XRP token and was selling it heavily. He continued claiming that he is a longtime holder and that he keeps XRP for future gains. He was lying to the public about his holdings, which is a crime if you sell them.
Brad dumped millions of personal XRP tokens via different exchanges. The sell-off keeps going since 2017, per the XRP ledger. Quick browsing shows that Garlinghouse sold at least 67 million of XRP tokens in 2017. He also sells all the XRP coins that Ripple the company is sending to him. Every time he receives a fresh batch, he sells it within a few days.
Ripple Again Releases 1 Billion XRP from Escrow
Ripple the company was created in 2013 by current Ripple’s executive chairman Chris Larsen, Jed McCaleb, and Arthur Britto, who later quit the firm. The digital asset was developed by a company known as Newcoin in 2012. A month later, the company changes name to OpenCoin. Then in 2013, it changes the name again to Ripple Labs.
Garlinghouse has started promoting it, settling in one of California’s most beautiful offices. Ripple even holds the exclusive right on the XRP trademark.
Per Preston Byrne, the blockchain technology master:
“Yes, Ripple created XRP, they own most of it and it was issued after company formation.”
Despite the many claims that Ripple works thanks to the community, CryptoBriefing’s Mitchell Moos thinks that the coin is more centralized than you may think.
Ripple is currently holding an equivalent of $15 billion in XRP tokens which are still unsold. And Ripple is the sole issuer of the tokens and the biggest seller on the market. The company helps several banks filling the gaps in remittance.
For instance, major banks don’t want to open branches in Mexico. The ones who open take big financial risks. Also, as the banking infrastructure is not developed well, the banks simply don’t see the profit. Ripple allows the money transfer to happen thanks to their Ripple Net. They have hundreds of banks worldwide signed up on the service.
Ripple has recently released a hefty of coins from the Escrow official address. The transaction containing 1 billion tokens worth of $173.5 million appeared in XRP blockchain.
🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 500,000,000 #XRP (86,752,817 USD) unlocked from escrow at Ripple Escrow wallet
— Whale Alert (@whale_alert) April 1, 2020
Twitter commentators immediately increased presence with sarcastic gifs. The haters gonna hate, but Ripple seems like attracts as much hate as possible from the crypto commentators seeking for Eternal Justice. Per the overall sentiment, we can make a presumption that the investors are expecting another major XRP price drop.