Ripple Under Fire: Tens of Thousands of XRP Investors Can File Claims

The world of cryptocurrency is in constant flux, with legal and regulatory challenges often causing turmoil. A recent federal lawsuit has now put Ripple Labs Inc., the company behind the cryptocurrency XRP, in a critical position.

According to a federal judge ruling, tens of thousands of XRP buyers have the ability to file securities claims against Ripple. This ruling could have far-reaching consequences for Ripple and its investors. In the following text, we will take a closer look at this important lawsuit and its possible consequences.

Possibility of Claims against Ripple

Federal Judge Phyllis J. Hamilton of the United States District Court for the Northern District of California officially recognized a group of investors in the class action class Zakinov v. Ripple Labs Inc. According to the lead plaintiff, Ripple broke the law by not registering XRP as a security.

Judge Hamilton’s ruling means thousands of XRP buyers can now jointly file a claim against Ripple, its subsidiary XRP II and CEO Bradley Garlinghouse. As previously reported, the last hearing of this lawsuit against Ripple was two months ago.

What Does the Ruling Mean for Ripple and XRP Investors?

US Judge Phyllis Hamilton issued an order on June 30. This order allows US XRP investors to take legal action. It is important to note that the case is limited to US investors only, even though Ripple operates worldwide.

Changing Legal Landscape for Cryptocurrencies

Judge Hamilton acknowledges that the legal situation around cryptocurrencies is changing. She says many countries are still struggling with how to classify digital currencies. She thinks it is important that other countries can make their own rules for cryptocurrency. Therefore, she does not want to apply California law to all global XRP buyers.

Good news for the plaintiffs

This decision is a major victory for the Chief Prosecutor and his legal representatives, Susman Godfrey and Taylor-Copeland Law. Sostack claims he suffered a loss of $118,100 after selling his XRP in 2018 due to Ripple’s misleading statements about the coin’s status as a security. This judgment opens the way for other XRP investors to join the class action lawsuit and demand compensation for their alleged losses.

Conflicting views within the group

Not everyone in the group agrees on XRP’s status as a security. Ripple’s lawyers and CEO Garlinghouse think these disagreements will lead to conflict.

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Judge Hamilton sees this differently. She believes these differences can be resolved with the standard opt-out procedure. Members who disagree with the group can get themselves out of the lawsuit.

Responses to the Ruling and Future Expectations

Nick Spear, lawyer for Susman Godfrey, is satisfied with the verdict and looks forward to the continuation of the case. On the other hand, a Ripple spokesperson underlines the importance of letting cryptocurrencies be regulated by individual countries.

The spokesperson adds that the court is willing to await the outcome of the ongoing case between the SEC and Ripple before proceeding with this lawsuit.

Conclusion

The recent ruling in the Zakinov v. Ripple Labs Inc. marks an important milestone in the crypto world. Federal judge, Phyllis J. Hamilton, allowed tens of thousands of XRP buyers to file claims against Ripple. This came after allegations that Ripple violated federal and state laws by not registering XRP as a security.

The lead plaintiff, Bradley Sostack, and countless other XRP owners who have suffered losses are now seeing opportunities for compensation. However, the case is being limited to US investors, despite Ripple’s global reach.

While some parties, including Ripple’s lawyers and CEO, argue that conflicts can arise from conflicting opinions within the group, Judge Hamilton believes this can be resolved with an opt-out process.

As it stands, there are mixed feelings about the ruling. Some look forward to the continuation of the case, while others emphasize the need for individual regulation of cryptocurrencies by country.

The case now awaits the outcome of another major lawsuit – the SEC vs. Ripple. Either way, these developments will undoubtedly have major implications for the future of Ripple, XRP, and wider crypto regulation.

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