Latest Development in Ripple vs SEC: Additional Class Action Complicates Legal Dispute, XRP’s Status Hangs in the Balance

The year 2024 appears to be a challenging one for Ripple as it faces setbacks in its ongoing legal battles. After a loss in the discovery phase with the Securities and Exchange Commission (SEC), Ripple is now embroiled in another lawsuit with California regulators.

The lawsuit, filed in the Northern District of California, accuses Ripple of selling XRP without proper registration and violating securities laws. The plaintiffs are seeking to represent two groups: the Federal Securities Claims Class and the California State Securities Claims Class, which consist of individuals and entities who purchased XRP between July 3, 2017, and June 30, 2023.

In response to the lawsuit, Ripple has denied the allegations, arguing that XRP is not a security and therefore does not require registration. However, this regulatory lawsuit puts Ripple in a precarious position, as it could complicate its relationship with the SEC. Ripple’s stance is that XRP is a digital currency for global transactions, not a security. The outcome of this case could have significant implications for how digital assets are regulated in the United States, affecting the entire cryptocurrency market.

Investors who have been impacted by the lawsuit have until April 5 to decide whether to opt-out and pursue separate legal actions against Ripple. This decision underscores the importance and potential consequences of the lawsuit for both Ripple and stakeholders in the digital currency market.

In addition to the California lawsuit, Ripple is also dealing with a lawsuit filed by the SEC in December 2020. The SEC alleges that Ripple conducted an unregistered securities offering of $1.3 billion through XRP sales.

The regulatory landscape surrounding Ripple continues to be complicated, with recent developments further adding to the confusion. For example, digital asset exchange Kraken has filed a motion to dismiss the SEC lawsuit, citing a ruling by Judge Torres regarding programmatic sales. These legal battles highlight the regulatory uncertainties faced by the cryptocurrency industry and emphasize the need for clear policies governing digital assets.