Brad Garlinghouse, CEO of Ripple Labs, addressed the recent California court decision regarding the class action lawsuit involving XRP. In a post, Garlinghouse highlighted the misleading nature of some headlines about the ruling.
He stated, “All class action claims in the suit were DISMISSED, and absolutely nothing in the decision negates or changes the fact that XRP is, in and of itself, not a security (per the NY Court decision). The CA ruling dismissed all allegations that Ripple had somehow violated federal securities law by selling XRP.”
What’s the matter?
As per reports, the court decision delivered by Judge Phyllis Hamilton of the US District Court for the Northern District of California dismissed the bulk of the class action claims but left one state law claim to proceed to trial.
This claim concerns allegations that Garlinghouse made “misleading statements” about the sale of securities during a 2017 televised interview. Garlinghouse defended his statements and expressed his readiness to address them during the trial.
Ripple’s Chief Legal Officer, Stuart Alderoty, commented on the ruling. In a statement, Alderoty said, “We are pleased that the California court dismissed all class action claims. The one individual state law claim that survived will be dealt with at trial.” He pointed out that the plaintiff in this remaining claim did not buy XRP directly from Ripple, cannot confirm hearing the alleged misleading statement, and owned only a couple of hundred XRP.
Ripple CEO opens up
The class action lawsuit accused Garlinghouse of violating California’s securities laws by professing to be “very, very long XRP” while simultaneously selling “millions of XRP on various cryptocurrency exchanges” throughout 2017. Ripple’s legal team argued that XRP does not meet the definition of a Security under the Howey Test, which outlines criteria for what constitutes a Security.
Garlinghouse concluded his response by underscoring the flawed nature of the remaining claim and criticizing those who attempted to exploit the legal system for financial gain.
He added, “This was a clear example of the trolls that unsuccessfully tried to take advantage of the US legal system and distort statements to seek 100’s of millions in class action settlements.”
Judge Hamilton’s ruling aligns with U.S. District Court Judge Analisa Torres’ reasoning in a parallel case in the Southern District of New York (SDNY), which found that XRP is not a security.
