By
Bena Ilyas
April 24th, 2024
According to the investigation lawyer from global law firm Kober & Kim, Jake Chervinsky, it will take more than a year to understand whether Ripple’s XRP is a security or not. Here’s why.
A consolidated class action in federal court in Oakland may one day lead a court to rule on (1) whether Ripple violated U.S. Securities laws by creating the XRP token and (2) whether XRP is a security. It seems that the exact day will not be in 2019, judging from a scheduling order entered by the Court on March 18.
The Order sets forth a schedule for roughly the next twelve months.
According to dispute and investigation lawyer, associated with a global law firm Kober & Kim, Jake Chervinsky, it will take more than a year to understand whether or not Ripple’s XRP is a security.
18/ And here's your reminder that the SEC has nothing to do with this case.
The SEC's enforcement lawyers are probably following along to see how the case develops, but they aren't directly involved & they can do whatever they want regardless of what happens in the class action.
— Jake Chervinsky (@jchervinsky) March 22, 2019
Federal Court Saga
He said that it took more than nine months for the court to decide whether the case should remain in federal or state court, adding that the court proceedings had just started.
“Even though we’ve been talking about the Ripple securities litigation for almost a year, the case basically just started this week, and it’ll be a very long time – another year or more – before anything truly interesting happens.”
He also wrote:
“As a refresher, the plaintiffs in the case allege that XRP is an unregistered security and that Ripple broke the law by issuing and selling it to the public. The plaintiffs say every class member – meaning every XRP purchaser – is entitled to a refund, plus compensatory damages.
Eventually, I expect Ripple will vigorously deny those allegations in court, but they actually haven’t had to file a substantive response yet. If you can believe it, the case was tied up for almost nine months just to decide whether it should be in state or federal court.
Last month, the federal court denied the plaintiffs’ motions to return to state court, so the case will now stay federal. At the time, I called this a ‘minor but meaningful’ victory for Ripple. It’s a battle they fought hard to win, but a small one at the start of a long war.
As for the upcoming litigation battles, Jake Chervinsky shared:
4/ So, let's talk about what battles are coming next. The court's order this week set a schedule for the next three phases of litigation:
(1) appointing lead plaintiff & lead counsel
(2) re-filing a consolidated complaint
(3) responding to the complainthttps://t.co/tIyY33vqVg— Jake Chervinsky (@jchervinsky) March 22, 2019
He further continued:
5/ First, the Court ordered the plaintiffs to post a public notice of the case, which they did on Wednesday.
The notice tells all potential class members out there–again, all XRP purchasers–that they can seek appointment as lead plaintiff, if they want.https://t.co/VEVelSRlJX
— Jake Chervinsky (@jchervinsky) March 22, 2019
Just for reminder, in August last year, after being sued by multiple investors in the past who claim XRP tokens to be securities, Ripple got some hope and relief. Ripple Labs has been working on addressing several class action lawsuits filed against it. The company is also trying to coordinate for a single response to lawsuits of a similar nature.
After that, attorney Peter Morrison supported Ripple Labs and retaliated on the charges of XRP as securities. Morrison cited that lawsuit also involves an Israeli resident, hence it should be moved under the ambit of international cases. Having faced multiple lawsuits, Ripple Labs is trying to make persistent efforts to streamline the case and fight all the similar allegations in a singular manner.
Binance CEO Doesn’t Think XRP is a Security
In a recent AMA session, Changpeng Zhao or CZ, the co-founder and CEO of the world’s largest cryptocurrency exchange, Binance embraced XRP, the well-known digital currency.
It was his second Ask Me Anything (AMA) live session on Twitter where he discussed various aspects on Binance exchange, BNB token, Binance DEX and unlike. In about 55 minutes of discussion, CZ also addressed the live questions many crypto enthusiasts asked him – addressing one such question that was related to XRP, CZ in his brief answer goes on to indicate that XRP is not a security.
However, the question concerned his announcement on XRP (if any) but he quickly responded (laughingly) if he talks more on the subject on XRP, he would be the part of XRP army.
“It’s very typical in our society that as soon as there is any accusation against you, you’re assumed guilty by many parties. I think people are aware that there is a lawsuit against XRP [he meant, Ripple], on whether they’re a security asset or not. Our judgment is they’re not, and until proven that they are, we listed them, and luckily we actually dragged other exchanges to list them,” he stated.
* To learn more about XRP coin, Ripple Labs company and their innovative solutions, please check out our awesome “What is ripple?” guide.