Ripple Labs, the issuer of the XRP cryptoasset, is facing another lawsuit filed on behalf of Florida-based XRP buyer Tyler Toomey.
According to the documents , the plaintiff accuses the company of violating the Florida Securities and Investor Protection Act by offering XRP to retail investors without any restrictions. Ripple's inability to pay corporate expenses allegedly forced it to sell XRP to “as wide a range of investors as possible,” while controlling its supply and liquidity. The lawsuit states:
"In other words, the vast majority of Ripple's revenue came from XRP sales (over $ 1 billion), and Ripple relied on those sales to fund its operations."
The lawsuit also mentions Ripple CEO Brad Garlinghouse as an individual defendant. According to the plaintiff, Garlinghouse sold about $ 150 million worth of XRP from April 2017 to December 2019, manipulating the price of the cryptoasset:
"At various times between April 2017 and December 2019, Garlinghouse also paused its XRP sales as the market price of the crypto asset was falling, and he sought to avoid it."
Similar claims for violating US securities laws have already been filed against Ripple Labs. In May 2020, Bitcoin Manipulation Abatement filed a lawsuit against Ripple, accusing the company of defrauding investors and selling XRP as unregistered securities, as well as violating federal laws.
In 2018, California resident David Oconer accused the company of violating US securities laws and demanded damages from falling prices. In the same year, investor Bradley Sostack filed a class action lawsuit in court, but Ripple filed a motion to dismiss it because Sostak was unable to prove the XRP purchase during the ICO.