A disgruntled XRP investor has filed a class-action lawsuit against Ripple, alleging that the company violated US and state-level securities regulations by selling the token to the general public.

The lawsuit, which also names as a defendant Ripple CEO Brad Garlinghouse, argues that Ripple has essentially conducted a “never-ending ICO” that should be classified as an unregistered securities offering according to definitions used both by the US Securities Act and the California Corporations Code.

“Defendants have since earned massive profits by quietly selling off this XRP to the general public, in what is essentially a never-ending initial coin offering (“ICO”),” the suit claims. “In order to increase demand for XRP, and thereby increase the profits it can derive by selling XRP, Ripple Labs has consistently portrayed XRP as a good investment, relayed optimistic price predictions, and conflated Ripple Labs’ enterprise customers with usage of XRP.”

Ryan Coffey, the lead plaintiff in the case, claims that he purchased 650 XRP on Jan. 6, 2018, when the token was trading at $2.60. Less than two weeks later, on Jan. 18, he sold the entire stake for $1,105 in USDT (a USD-pegged token created by Tether), ultimately yielding a net loss of $551 — or 32 percent — due to price fluctuations between USD and USDT.

However, the case was brought on behalf of all XRP investors who purchased tokens after Jan. 1, 2013.

The case was filed by Taylor-Copeland law, a California-based law firm that specializes in blockchain and cryptocurrency-related cases.

As CCN.com reported, the Securities and Exchange Commission (SEC) has opened probes into dozens of ICOs to determine whether they constitute unregistered securities offerings, and US regulators have scheduled a meeting next Monday to discuss whether particular cryptocurrencies should be lumped into this category as well.

Former Commodity Futures Trading Commission Chairman Gary Gensler recently said that he would classify XRP as a “noncompliant security” due to its centralized distribution model.

However, Ripple executives have long maintained that XRP is exempt from this classification, and the company further says that it has not yet been served with the lawsuit.

“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time,” Tom Channick, Ripple’s Head of Communications, told CCN.com in a statement. “Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security.”

At present, XRP is valued at $0.90, which provides it with a circulating market cap of $35.4 billion and makes it the world’s third-largest cryptocurrency.

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