Ripple has filed a motion seeking to dismiss a complaint alleging that it broke security laws by selling unregistered securities.
Ripple attorneys indicate claim was not filed within three years
On Friday a new filing posted indicated that Ripple attorneys are pushing back on the allegations brought against it by XRP buyers. The buyers are suing Ripple, its executives, as well as its subsidiaries. Interestingly the motion aims to dismiss claims that Bradley Sostack the plaintiff doesn’t have a right to file a suit. The firm claims that the plaintiff did not bring the file the claim within three years of the initial offering. This means the decree of repose had expired, and the plaintiff did not show that he bought XRP during the period.
The motion to dismiss further indicates that the petitioner didn’t “plausibly allege” that any of the accused sold the XRP. Equally, regarding the petitioner’s claim on consumer protection under the California state law, the motion indicates that it should be dismissed since the statutes need a securities to claim.
Sostack filed a petition against Ripple stating that its sale of altcoins in 2013 involved unregistered securities offering. Despite Ripple denying the allegation, the case has however raised concerns regarding the legality of the firm’s operations about XRP. Ripple executives have continuously denied any relationship with the token despite their current personal holdings and on-going sell-offs.
XRP is a currency and not a security
There are suspicions regarding the security aspect of the token as the attorney’s motion to dismiss didn’t address the issue. The motion does not explain why XRP is not a token, and that is mentioned only in a footnote. The footnote indicates that the token is not a security because it isn’t an “investment contract.” The footnote further indicates that because XRP is a currency under the law, it can never be security. The filing further indicates that the court should not determine if XRP is a currency or security for purposes of the motion that assumes the petitioner’s claim that XRP is a security.
The material of the filing caught the attention of Jake Chervinsky, who is a crypto-focused attorney. He adopted a more realistic view of the proceedings. In a tweet, he summarised it all by stating that they make twelve different opinions for dismissal of the suit. However, none of the arguments squarely addresses the view that XRP is unlawful security.
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