Thursday, June 13, 2024

XRP holders bring class-action lawsuit against Ripple Labs, complicating SEC case

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Alicia Garcia
Alicia Garcia
Alicia is excited about all things tech. She devotedly follows blockchain and crypto updates, sharing her passion through writing about it. She is a regular contributor for cryptocurrency news and articles.

Ripple Labs, the creator of the cryptocurrency XRP, is currently facing legal challenges from XRP holders who claim that XRP is a security. The Zakinov v. Ripple Labs lawsuit, which is a class-action brought by a faction of XRP holders, could potentially impact the outcome of the central SEC vs. Ripple case.

During a recent hearing on April 26, 2023, Nick Spear, a lawyer representing Zakinov, argued that approximately 75,000 XRP holders are allegedly “fake” and therefore irrelevant. He attempted to explain how damage calculations could be conducted despite this issue. District Judge Phyllis J. Hamilton expressed skepticism about the global class-action lawsuit, noting that there is no precedent for such a case.

Ripple’s defense strategy in the case involves presenting evidence of XRP holders who support them in the SEC case and arguing that a “class” is not a suitable solution because it would force 74 holders to “opt-out.” Ripple attorney Andrew Michaelson also argued that XRP buyers did not rely on Ripple, including those overseas. Additionally, he highlighted several uses of cryptocurrencies, such as cross-border payments, and agreed with the judge that use cases are essential. Furthermore, he emphasized that the plaintiffs made purchases on the secondary market, meaning there was no written contract between them and the defendant.

John Deaton, an Amicus Curiae in the Ripple vs. SEC case, voiced his concern that if the judge approves the certification for the Zakinov class-action lawsuit, the case may be challenged on appeal. Deaton also applied for amicus status in the Zakinov litigation but was not allowed to appear at oral argument.

xrp photo
Photo by BeatingBetting

Overall, Ripple’s legal challenges continue to mount as XRP holders turn against the company in court, further complicating the already intense dispute with the U.S. Securities and Exchange Commission. Both Ripple Labs and XRP holders are on edge as they await the crucial Summary Judgment in the protracted legal battle.

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