x

Ripple Files to Move Securities Lawsuit from State to Federal Court

by

        Ripple Files to Move Securities Lawsuit from State to Federal Court
Ripple Files to Move Securities Lawsuit from State to Federal Court

Ripple’s legal team in their ongoing securities suit is attempting a new tack: to have the claim proceed at the federal level.

In a move that legal commentator Jake Chervinsky described as “seriously crafty,” Ripple has filed a formal notice-of-removal motion to have their most recent securities suit, Zakinov et al v. Ripple, tried in a federal court rather than at the state level.  

In the notice of removal, the defendants, which include Ripple and its CEO Brad Garlinghouse, among others, request that the court “remove the … civil action, and all claims and causes of action therein, from the Superior Court of the State of California, County of San Mateo, to the United States District Court for the Northern District of California.”

The class action is a consolidation of three separate suits filed by Vladi Zakinov, David Oconer and Avner Greenwald “on behalf of all California citizens who purchased or otherwise acquired XRP from January 1, 2013 to the present.” It claims that since Ripple has failed to register with the U.S. Securities and Exchange Commission (SEC), XRP has been sold as an unregistered security, and the combined class action is seeking nearly $17 million in damages.

Swamped with legal troubles, Ripple has sustained several legal challenges to their sale of XRP tokens, with many alleging that these token sales constitute securities fraud. Although Ripple has yet to face any serious consequences as a result of these battles, facing three securities suits in a single year could prove to be a serious strain on Ripple’s resources.

This latest attempt to plead their case at the federal level may set vital precedent, if successful. A federal clarification on the interaction of securities laws and token sales could shut down future cases before they even begin.

This appears to be the pretext for attempting to move this suit to a different court system, at least. As Chervinsky went on to elaborate, a suit argued on Ripple’s behalf in the state of California could also serve as a precedent to stop the tide of frivolous securities lawsuits levied at Ripple.

At this early stage in the fight, Ripple’s legal team could also believe “they have better odds of winning in federal court than in state court (or else they wouldn’t be trying so hard to remove the case),” Chervinsky continued.

To be clear, the notice of removal still needs to be approved by the Superior Court of the State of California, County of San Mateo, before it is bumped up to the federal circuit. Following the notice, the plaintiffs submitted a filing to request that the case persist at the state level.





Recommended

QuadrigaCX CEO Widow Sells Estate Assets, Reportedly Places Others in Trust

Jennifer Robertson has been selling assets of the late Gerald Cotten's estate, and she's allegedly shuffled some of these assets into a trust for legal protections.

Colin Harper

Judge Delays Decision to Appoint Legal Counsel for QuadrigaCX Creditors

During the session, the Honorable Justice Michael Wood heard testimonies from the four law firms that creditors have turned to for counsel as they seek recovery of funds from the troubled Canadian bitcoin exchange.

Colin Harper

QuadrigaCX Sent Deposits Allegedly Linked to CEO’s Widow, Mailed Withdrawals in Cash

Emails suggest that some clients of QuadrigaCX may have received deposits from entities associated with Jennifer Robertson, despite sworn claims that she had nothing to do with the exchange's operations prior to her husband's death.

Colin Harper

First QuadrigaCX Monitor Report: $460k in BTC “Inadvertently” Sent to Cold Wallet

The court document states, “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access.”

Colin Harper