Ripple has filed for dismissal of an anti-trust lawsuit, filed against the company in the United States. In the lawsuit, the company has been alleged of violating U.S. securities law by selling the XRP token and manipulating its price.
Attorneys for ripple pushed against the allegations that were made by Ripple investors, who had invested in Ripple’s XRP token by filing for a motion to dismiss. The angry investors sued Ripple’s subsidiaries and executives for allegedly manipulating the price of the XRP token.
The motion to dismiss, claiming that the accuser Bradley Sostack has no standing to file a complaint against Ripple. The motion claims that the plaintiff did not bring the case forward within 3 years of the initial offering of XRP In 2013, meaning that the statute of repose has expired, and now there’s no case to be made.
Furthermore, the motion also highlights how the plaintiff did not “plausibly allege” that he bought XRP tokens during the initial offering and he also did not plausibly allege that he bought the tokens from any of the accused. The document reads:
“Under Plaintiff’s own allegations, Defendants offered XRP to the public from 2013 through 2015. Accordingly, the three-year statute of repose expired as of 2016 (three years after the sales cited in the May 2015 settlement) and in no case later than May 2018 (three years after the May 2015 settlement agreement in which ‘Defendants acknowledged that they had sold XRP to the general public,’ Complaint ¶ 25). The Securities Act claims in the Complaint, filed August 5, 2019, are therefore untimely and barred by the statute of repose.”
The company also claimed that XRP is not a security and cannot be trialed under the law that the plaintiff claims was violated. The motion did not, however explain why the XRP token is not a security. The question was only addressed in a footnote of the filing which read that XRP is not an investment contract and thus, has no legal binding as security. The filing further says:
Purchasing XRP is not an ‘investment’ in Ripple; there is no common enterprise between Ripple and XRP purchasers; there was no promise that Ripple would help generate profits for XRP holders; and the XRP Ledger is decentralized.
The footnote also adds that the XRP token is meant to be a currency and a currency can’t be considered as security and trialed under U.S. securities law. The document says that the court does not need to determine “whether XRP is a security or currency for purposes of this motion, which assumes the Plaintiff’s allegation that XRP is a security.”
The filing also goes on to claim that the plaintiff did not buy XRP tokens during the initial offering and neither did he buy the tokens directly from Ripple’s executives named in the lawsuit. The filing claims that the obvious inference from the defendant’s claim is that he bought and sold XRP through a secondary exchange. If he has bought the XRP tokens through a secondary exchange, this proves that the plaintiff’s consumer protection claim under the California law should be dismissed because XRP is not a security.
As a result, the lawyers have claimed there to be a prejudice in the case and have called for dismissal. The motion also argues that:
Leave to amend should be denied because amendment would be futile