A lawyer who focuses on litigation involving securities at the firm Kobre & Kim just issued a big update on the class-action lawsuit against Ripple, which alleges the company violated state and federal laws by selling XRP as an unregistered security.
According to Jake Chervinsky, who is well-known in the crypto community for his insight on blockchain-related cases and exchange-traded funds, Ripple will likely issue a motion to dismiss, when the time is right.
“The Ripple securities class action took a step forward this week, as the court set a schedule for roughly the next year of litigation. Here’s an update on where the case stands, what’s next, and when we’ll answer the question that never dies: ‘is XRP a security?’
As a refresher, the plaintiffs in the case allege that XRP is an unregistered security and that Ripple broke the law by issuing and selling it to the public. The plaintiffs say every class member – meaning every XRP purchaser – is entitled to a refund, plus compensatory damages.
Eventually, I expect Ripple will vigorously deny those allegations in court, but they actually haven’t had to file a substantive response yet. If you can believe it, the case was tied up for almost nine months just to decide whether it should be in state or federal court.
Last month, the federal court denied the plaintiffs’ motions to return to state court, so the case will now stay federal. At the time, I called this a ‘minor but meaningful’ victory for Ripple. It’s a battle they fought hard to win, but a small one at the start of a long war.
So, let’s talk about what battles are coming next.