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Florida class action lawsuit alleges Ripple violated securities laws

Ripple Labs, a company behind the Ripple payment protocol and XRP-based products, is facing another lawsuit alleging the firm violated securities laws in the United States.

According to a Jan. 25 court filing, Florida-based XRP investor Tyler Toomey has filed a civil suit against Ripple Labs and Ripple CEO Brad Garlinghouse. The lawsuit claims that the defendants failed to comply with Florida securities laws by failing to register with the Florida Office of Financial Regulation.

As reported by Cointelegraph, Toomey stated that Ripple Labs and Garlinghouse were already facing a similar lawsuit for allegedly violating federal securities laws. The $1.35 billion suit was brought by the U.S. Securities and Exchange Commission on Dec. 22, 2021. 

The new class-action accuses Ripple of selling millions of dollars of unlicensed XRP tokens, and generating large revenues from those sales, stating, “The overwhelming majority of Ripple’s revenue came from its sales of XRP (over $1 billion), and Ripple relied on those sales to fund its operations.”

The plaintiff also alleged that Ripple made false statements about XRP by stating that the token should not be classified as a security. Toomey claimed that the defendants knew that XRP was indeed a security:

“Defendants made false statements and/or omissions regarding material facts related to the true nature of XRP. Specifically, Defendants knew that XRP was in fact a security, but affirmatively misrepresented to investors that it was not a security. Defendants knew XRP was a security before Defendants sold XRP into the market.”

Pursuant to federal rules of Civil Procedure, Toomey requested a trial by jury of any and all issues brought in the action.

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