Daily fraud update: 7th May

Chris Lee

Lawsuit lodged in court against Ripple

The blockchain-powered liquidity provider Ripple has had a class action lawsuit lodged against it in the US.

A firm called Bitcoin Manipulation Abatement LLC is believed to be behind the lawsuit, which was filed last week.

Both Ripple as a business and the firm’s CEO, Brad Garlinghouse, are named as defendants in the case.

The lawsuit accuses them of raising a significant amount of funds through an initial coin offering (ICO), and specifically alleges that this ICO was not registered with the correct regulator.

The wording of the court documents appears to accuse Ripple of having done this for profit – and of also engaging in “false advertising”.

“In order to drive demand for and thereby increase profits from the sale of XRP, defendants have made a litany of false and misleading statements regarding XRP in violation of California’s securities laws, and false advertising and unfair competition laws”, the documents allege.

“Defendants have since earned massive profits by selling off XRP to the public, in numerous offerings, having sold $1.1 billion in XRP to retail customers in exchange for legal tender cryptocurrencies”, they add.

Those in the crypto space offered comments on the case – with one crypto expert claiming that cases like these were becoming “old hat”.

Stephen Palley, who is a partner at law firm Anderson Kill and an advisor to a cryptocurrency company, made the comment on the social networking site Twitter.

“In what is getting to be old hat, yet another lawsuit against Ripple and Mr. Garlinghouse has been raised saying that XRP is an unregistered security, created out of thin air, and serves no real purpose except to make a couple of people really rich”, he said.

The “old hat” comment could be referring to the context of cryptocurrency industry lawsuits against Ripple and others.

Bitcoin Manipulation Abatement LLC has been involved in another class action lawsuit, this time against the crypto derivatives firm FTX.

It has also been involved in a number of other lawsuits, although according to the crypto press there is little public information available about the firm.

Ripple is also currently facing a range of accusations from elsewhere.

There is, for example, a class action lawsuit against it from a number of traders way back in its history, who accuse it of selling securities which were not properly registered.

Last year, that lawsuit generated a whole host of responses from the crypto community.

One pro-bitcoin analyst named Tone Vays said that XRP, which is Ripple’s digital currency, was a scam.

“The SEC is bringing Thor’s Hammer,” Vays was quoted as having said, again on Twitter.

“Come at me XRP Army … your scam coin should never have existed.”

Ripple has, however, also been on the other side of lawsuits.

The company recently sued YouTube, for example, for allegedly failing to take down scam videos.

“For every scam, giveaway, fake conspiracy that is taken down, multiple more pop up nearly immediately”, Ripple said at the time of that lawsuit.

YouTube said it takes abuse allegations seriously.


Chris Lee

Latest news

Scammer Alert – Trader Feedback on The Scams Currently Doing the Rounds
The Forex Fraud team has received more messages from scammed traders pointing out how recent crypto price rallies are bringing an old scam, the double-dip, back to the table. Read more
State of the Nation – Up to Date Reports on Which of the Brokers Can be Trusted – Tickmill
Given the amount of technical and fundamental analysis that goes into running a successful investment strategy, it’s often surprising how many traders skip analysing the health of their broker. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2011 Global CFD & FX Broker
Number One Broker
BEST FOREX BROKER Visit broker
5
#2 ForexTB logoYour capital is at risk Founded: 2015 Global Forex & CFD Broker
Number One Broker
LOWEST FEES Visit broker
4.9
#3 Tickmill forex broker logoYour capital is at risk Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#4 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#5 Forex Broker Pepperstone LogoCFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9

    Forex Fraud Certified Brokers

    AvaTrade logo
    ATFX Logo
    Exness Small Logo
    Plus500 Small Logo
    HYCM Logo
    Forex.com Logo
    skilling logo
    investous
    OctaFX Logo
    FXTM Logo
    LegacyFX Small Logo
    City Index Logo
    IC Markets Logo
    IQ Option Logo
    Vantage FX logo
    BlackBull Markets Logo
    XM Logo