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Lawsuit Against Ripple Raises Interesting Concerns about the Purpose of XRP tokens

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A class lawsuit has been signed by an investor against Ripple. The investor claimed to have lost funds while trading the XRP cryptocurrency alleging that Ripple (the startup technology company managing the XRP token) is in violation of federal and state laws on security.

The investor who goes by the name Ryan Coffey was represented in court by James Taylor Copeland who is a San Diego based attorney. According to Coffey, the lawsuit issued on Thursday in San Francisco County Superior Court was intended to speak on behalf of other investors as well. Coffey claims that the rest of the investors represented in the lawsuit also bought Ripple (XRP) tokens and lost their investments in the long run. The lawsuit was issued against Ripple, a company headed by Brad Garlinghouse and registered under a South Carolina limited liability license as a company with 10 unnamed partners.

Ripple Under More Scrutiny

This comes just weeks after Ripple Labs and Garlinghouse came under scrutiny over the clarity of the relationship between the XRP tokens and the company Ripple. According to Ryan Zagone who is the director of Ripple’s regulatory relations, “there’s no direct connection between Ripple the company and XRP.” He said this on Tuesday to a UK parliament committee.

The XRP token has had various ups and downs in the crypto space and it has managed to capture the attention of many cryptocurrency investors and traders both in the retail sector as well as the institutional sector. Last year alone, the coin gained a market capitalization of over $140 billion only to fall back again below the $35 billion mark as of this publication.

The Thursday lawsuit came to light after Ryan Coffey’s lawyer tweeted about it.  However, the lawsuit has led a fresh rise of concerns over whether the XRP token is a security or not. In fact, there have been reports issued by a major cryptocurrency exchange questioning the real purpose of XRP even as the mother company brings in partnerships with industry-leading companies such as MoneyGram, Microsoft not to mention close to 100 banks registered on its RippleNet platform.

Ripple on the Defense

While Ripple was on defense on Tuesday, more skepticism arose from the hearing with the complaint arguing that,

the development of the XRP Ledger and the profits that investors expected to derive therefrom were and are based entirely on the technical managerial and entrepreneurial efforts of Defendants and other third parties employed by defendants

This argument, based on the realization of the XRP token as securities issued by the Ripple company was met with a contrary comment received by CoinDesk after reaching out to Tom Channick, the head of corporate communication at Ripple, who said that it’s the Securities and Exchange Commission that decides on whether an asset is a security.

Basically, the US federal law requires that a company seeking to sell securities should first register with SEC. After all, it is the duty of the Howey Test to qualify financial instruments as securities based on the 1964 Supreme Court case standards.

The lawsuit, however, sheds light on the uncertainties surrounding the relationship between XRP and Ripple. In his comment to CoinDesk, Chammick also added that although they have seen the lawyers tweet, the company “has not been served”. He went on to say that Ripple management does not consider XRP to “be classified as a security”.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

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The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

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Altcoins

Top 3 Coins to Buy Before They Go Big

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Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

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Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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crypto credit cards
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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

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