Over 6,000 XRP holders have joined a motion to intervene filed by Deaton Law Firm on Sunday 14th of March of 2021 in an attempt to intervene as a third-party defendant.
John E. Deaton, the lawyer representing XRP holders in the motion, says he also has notified the Securities and Exchange Commission (SEC) of his intention to file a class-action lawsuit against the regulatory body due to damages caused by its,
“intentional misconduct and/or gross negligence and gross abuse of discretion related to its allegations and claims regarding the Digital Asset XRP.”
Ripple is Going Hard on the SEC
The motion cites Ripple’s claim that the lawsuit’s “overreaching allegations have caused harm not only to Ripple, but also to hundreds of nonparties that integrate XRP into products or offerings or otherwise support XRP and to millions of XRP holders,” which according to Mr. Deaton would allow the group in represents to intervene in the lawsuit.
In addition to this, the SEC filed a motion to dismiss an XRP holder’s petition for a Writ of Mandamus claiming that the court currently addressing the lawsuit “serves as the exclusive forum to hear all claims related to its Complaint against Ripple and the Digital Asset XRP”.
This motion is just the latest event in the ongoing litigation of the SEC against Ripple Labs and 2 of its executives, which according to Deaton caused over $15 Billion in losses to XRP holders in the days following the news.
How it Has Unfolded So Far…
Back on December 22 of 2020, a lawsuit was filed by the then SEC chairman Jack Clayton against Ripple Labs, its Co-Founder Chris Larsen, and CEO Bradly Garlinghouse for raising over $1.3 billion through the cryptocurrency XRP, which according to the regulatory body was an unregistered digital securities offering.
While there is not a regulatory framework in place in the United States that allows blockchain and cryptocurrency companies to navigate the legal aspects of crypto and even the SEC has refused to set rules in that regard, the filing was applauded by some crypto critics.
The lawsuit resulted in major exchanges like Binance US and Coibase removing the cryptocurrency from its offering while hedge funds like Grayscale proceeded to liquidate their existing XRP holdings.
A Rough Deal for Ripple
Ripple Labs has also lost existing partnerships with companies such as Monegram, who stopped using the payment solutions offered by Ripple “due to the uncertainty concerning their ongoing litigation with the SEC.”
Deaton filed a petition with the SEC asking for them to make a differentiation between XRP sales carried by the 2 executives involved and the ones that took place in exchange markets, which was later dismissed by the entity.
The Lawsuit has been closely followed by crypto enthusiasts due to the potential impact it could have on future legislation and regulatory efforts which could shape the future of the industry.
Ripple Settles Lawsuit With Youtube
Ripple’s conflict with the SEC is not the only recent lawsuit the company has been part of as it sued YouTube back in 2020 claiming that the platform failed to protect users from fake accounts impersonating the company to conduct scams.
Cryptocurrency scams have increased in popularity as digital assets continue to grow in adoption and value. These scams not only affect the victims but have also murked the reputation of cryptocurrencies in mainstream media and the companies behind them.
Ripple Labs CEO Brad Garlinghouse said that, “social platforms are starting to acknowledge their role in allowing crypto scams to persist and recognize the need to be part of the solution,” and while no details were disclosed, it suggested that accountability and action had been taking by the platform.
While there has been much discussion around the role that online platforms play in the regulation of the content published in them, the action against crypto scammers will prove to be beneficial for the entirety of the crypto market by dissociating them from illegal activities, an idea that mainstream media has propagated for years.