- Ripple faces a new legal battle in Florida for the sale of an unregistered security.
- The new complaint comes at a time when the company’s image is being affected by the SEC’s charges.
- The uncertainty surrounding Ripple might have a severe impact on XRP’s price.
Florida residents have filed a new class-action lawsuit against Ripple for the sale of XRP tokens. They claim the company violated the state’s securities laws.
Ripple’s Legal Uncertainty Intensifies
Tyler Toomey, a Florida resident, filed a new class-action lawsuit against Ripple Labs, its CEO Bradley Garlinghouse, and its subsidiary XRP II, LLC.
Toomey claims that the company sold millions of dollars worth of XRP tokens to Florida investors without registering the digital asset with federal or local authorities.
The plaintiff maintains that the defendants failed to comply with the state’s securities laws since it is unlawful to sell a security unless it is “exempt [or] registered pursuant to this chapter” under the Florida Securities and Investor Protection Act.
“[Ripple Labs] began their unregistered and unlawful sale of XRP in 2013, despite having knowledge as early as 2012 that XRP could be considered an ‘investment contract’ under federal and, by extension, Florida law. [The company] chose to disregard filing requirements and initiated a vast offering of XRP without registration. Further, [it] made affirmative representations to the investing public that XRP is not a security, when in fact it is,” reads the lawsuit.
The new complaint comes at a time when Ripple’s legal stability has been shattered after the U.S. Securities and Exchange Commission (SEC) went after it and two of its executives.
The regulatory watchdog also claims that the company raised over $1.3 billion through an unregistered and ongoing digital asset securities offering.
XRP Primed for Another Downswing
The current fear, uncertainty, and doubt that surrounds Ripple are wearing down XRP.
Although the token continues consolidating within a descending triangle, it seems like support is getting weaker over time.
A 4-hour candlestick close below the triangle’s x-axis at $0.25 could be significant enough to trigger panic selling among investors. If this were to happen, the odds for a 33% correction would increase drastically, pushing XRP’s market value towards $0.17.
This target is determined by measuring the distance between the widest range of the triangle and adding it to the breakout point.
Nonetheless, Ripple’s support in the Eastern markets could revive investors’ confidence in XRP. A new wave of capital flowing into the token that sends it above the triangle’s hypotenuse at $0.27 might jeopardize the bearish thesis.
Under such unique circumstances, XRP will have an opportunity to regain lost ground and rise to $0.35.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Source: Read Full Article