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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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Altcoins

Aluna.Social is a Compelling Social Platform for Crypto Traders and Investors

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When one thinks about the social media landscape, the companies that first come to mind are most likely Facebook, Instagram, LinkedIn, and Snapchat.  These platforms are a great way to stay connected with friends, families, and colleagues, especially when geographic distance is a factor.  But, in addition to just chatting about life in general and sharing pictures, social media can be used to bridge the information gap that exists within the investment community.

Over the last decade, many trading offices have been established in large cities all over the world which allow solo traders and investors to pay a monthly fee in exchange for a workspace.  The real benefit to trading in these offices is to participate in the free flow of trading ideas and information.  Proprietary trading is one of the most challenging careers to be successful at and the exchange of ideas is almost required in order to succeed.  Traders at hedge funds and investment banks work in teams so why shouldn’t remote traders?

While these trading offices are a great way to help bridge the information gap, Aluna.Social may provide an even better way, especially as it relates to cryptocurrency trading.

Mission Statement

Aluna.Social, founded by Alvin Lee and Henrique Matias, is a multi-exchange social trading terminal for crypto traders and investors.  The goal of the platform is to help newcomers shorten their learning curve,…

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Altcoins

CoinFlip Scores Big with BRD Wallet Partnership

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As the crypto markets move closer to mass adoption, one of the keys for future success will revolve around attracting as many market participants as possible.  While many crypto users are extremely tech oriented, a lot of those on the sidelines are not.  The cause of waiting on the sidelines could be due to a variety of reasons such as fear of the unknown, lack of knowledge, age, or a combination of all of the above.  In order to entice new users to join the crypto revolution, crypto ATMs are rising up across the country.  Of those, the largest and most influential crypto ATM company by a significant margin is CoinFlip.

In early October, CoinFlip announced on its Twitter that it had officially partnered with BRD Wallet to re-introduce their crypto ATM map.  Now, BRD wallet users will be able to locate their nearest CoinFlip ATM and receive a 10% discount for both buys and sells.  BRD brand awareness is growing quickly within the crypto community thanks to its innovative and entrepreneurial spirit.  The team strongly believes in the value of financial freedom and independence, and want to empower people across the world by leveraging the possibilities that Bitcoin and other cryptocurrencies provide.

Cryptocurrencies are already making a huge difference around the world.  Citizens of Venezuela, a country devastated by rampant inflation, have been using several cryptocurrencies…

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Altcoins

Cryptocurrency Collateralized Debt Positions Are Growing in Popularity

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While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle.  Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance.  One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess.  That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS.  These projects have managed to find a foothold in the market and have a better chance than most of staying there.  While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.

What is a Cryptocurrency CDP?

In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount.  There are several examples of this in our day to day lives.  Auto title loans from large companies like TitleMax are extremely popular with consumers.  Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has.  The consumer can continue using their car as long as debt payments are made.

The same concept applies to cryptocurrency CDPs.  Consumers are able to put up crypto tokens, such as…

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