Ripple is grappling with U.S. claims though The Securities and Exchange Commission (SEC) appears to be having its own share of the legal saga with regard to its XRP token, the largest U.S. cryptocurrency exchange Coinbase, as the firm faces a class action lawsuit for collecting commissions from the selling of XRP tokens.
Thomas C. Sandoval, the plaintiff, has filed a class-action lawsuit against the crypto giant based in San-Francisco, according to a court filing. The plaintiff charged that Coinbase, the defendant, sold XRP and earned commissions as an unregistered defence.
Sandoval, a Missouri resident, claimed in the complaint filed in the Northern District Court of California that he bought XRP twice on Coinbase prior to the SEC lawsuit and paid a fee to the exchange site.
The Plaintiff argued, however, that Coinbase knew that XRP was a security, but still went ahead to sell the token to its clients. In addition, the complaint alleges that the crypto exchange operated in breach of the Unfair Competition Law (UCL) of California, stating:
“Defendant’s actions were also “unfair” as that term used in the UCL, in that by selling XRP securities Defendant gained an unwarranted competitive advantage over digital asset exchanges that only sold commodities. As a result of Defendant’s conduct, Coinbase received commissions from Plaintiff and all other Class members.”
In addition, as determined by the court, the plaintiff is demanding compensatory damages, attorneys’ fees, and all other relief.
Ripple Caught in the Eye of a Growing Legal Storm
Other U.S. crypto exchanges that listed XRP could become subject to litigation with the latest growth, particularly if the courts side with the SEC against Ripple.
Many crypto exchanges have either de-listed or stopped trading XRP on their websites after the SEC litigation alleging that Ripple conducted a $1.3 billion unregistered securities offering. CryptoPotato announced that on January 13, 2021, the U.S. branch of Binance’s largest cryptocurrency exchange was the latest to declare that it will de-list XRP and also suspend XRP trading and deposits.
Ripple, however, is prepared to contest the arguments of the SEC, alleging in a release that the case has caused damage to holders of XRP. Meanwhile, the courts have set up an initial telephone pre-trial conference to be held in February 2021.
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