One of XRP investors has lodged a class action suit against Ripple company, citing that the latter broke the federal law about securities and California law after opening ICO.
The company will be represented by CEO Bradley Garlinghouse. According to the petition, the company actually held "never-ending ICO", that should be considered as securities sales under the US Securities Law and Corporation Code of California.
"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”). Like the better known initial public offering (“IPO”), in an ICO, digital assets are sold to consumers in exchange for legal tender or cryptocurrencies (most often Bitcoin and Ethereum). These tokens generally give the purchaser various rights on the blockchain network and resemble the shares of a company sold to investors in an IPO," the petition reads.
The key petitioner, Ryan Coffee, claims that he acquired 65 XRP at $2.60 on January 6, 2018, and less than in two weeks sold coins for USDT (Dollar-backed Teather token) and lost $551 in total (32% of the investments into token). It is said that this loss was caused by the price fluctuations between USDT and fiat US dollar.
Still, the suit is classified as a class action, signed on behalf of all investors which bought XRP after January 1, 2013, the date of Ripple Labs establishment.