By
Bena Ilyas
May 20th, 2024
In the ruling, Judge Hamilton agreed that the lead plaintiff Bradley Sostack had failed to support two claims relating to a series of allegedly fraudulent statements made by Ripple and Garlinghouse in 2017.
Blockchain payment company Ripple Labs Inc has won the part of the fraud lawsuit filed against it in a California Court. In a court ruling filed last Friday, Judge Phyllis J. Hamilton of the U.S. District Court of Northern California granted with prejudice two parts of Ripple’s motion to dismiss the 10 claims against it and its CEO Brad Garlinghouse.
“In short, the court concludes that plaintiff failed to adequately allege why any statement by defendants concerning XRP’s utility is false,” the case file indicated.
Perhaps the news was the primary reason XRP token jumped over the weekend and formed a double bottom on the 4-hour chart.
Into Ripple and XRP Class Action Lawsuit
The fraud accusations come as a consolidated action from a group of disgruntled investors who claim Ripple and Garlinghouse failed to register XRP as a security with the U.S. Securities and Exchange Commission and made misleading statements about the cryptocurrency.
The case has been going on for years, dragging XRP behind other top digital assets in adoption and its use case.
In the ruling, Judge Hamilton agreed that the lead plaintiff Bradley Sostack had failed to support two claims relating to a series of allegedly fraudulent statements made by Ripple and Garlinghouse in 2017.
Both institutional and retail investors have been wary of putting capital in XRP as a digital asset due to the pending court cases.
With the clarity of the asset defined by the U.S. court, the asset is poised to see a new set of adoption, even though the case is not yet over.
Ripple’s XRP has received backing from several U.S. policymakers and also from former Commodity Futures Trading Commission (CFTC) Christopher Giancarlo, who have publicly stated it is not a security.
Notably, Judge Hamilton denied Ripple a portion of the fraud case, hence more hearings to continue in the near future. Sostack may now proceed with four of the 10 claims.
Some of the claims to continue include a fourth claim relating to the allegation that Garlinghouse “misrepresented the status” of his XRP investment.
However, ever since the case began, Ripple has been pushing for openness in XRP liquidity especially in its programmatic monthly sales from the escrow account.
According to Giancarlo, XRP is not a security since the company has not marketed it as an investment product, nor has it promised XRP holders any sort of profit or return on investment.
However, since Giancarlo is no longer a regulator but on Ripple’s payroll, we can only wait on the final Court ruling.
With XRP having huge market capitalization in the digital asset industry, Ripple cannot afford to lose the case as it would mean the investors capital is directly pegged in the company’s success.