Ongoing XRP Sales Means Ripple Must Answer Investor Lawsuit — New Filing

Wilfred Michael 

Wilfred Michael

News reporter

05 November 2019,
Ongoing XRP Sales Means Ripple Must Answer Investor Lawsuit — New Filing

Bradley Sostack, the lead plaintiff in a long-standing lawsuit against Ripple, has argued in a recent filing that the company is not immune to responding to investor complaints as earlier claimed.

As reported in August, Ripple lawyers in a motion to dismiss, avoided the plaintiff’s complaint that the company was selling unregistered securities in the form of XRP tokens. Instead, they argued that Sostack and other plaintiffs failed to file their claim within the legally approved time for doing so.

The basic argument by Ripple was that Sostack failed to bring the matter to the court’s knowledge within three years (a statute of repose period) after the startup’s initial coin offering in 2013, and also that there was no evidence that he bought the tokens directly from Ripple.

However, in Monday’s filing, Sostack’s counsel wrote that Ripple’s claim that the lawsuit was filed after the statute of repose period has no legal precedent, and thus should not stand.

Notably, the filing mentioned that Ripple’s claim was an “out-of-circuit decision” which “cannot be squared with the Supreme Court’s more recent holding that the statute of repose ‘runs from the defendant’s last culpable act (the securities offering).'”

To this end, the company’s ongoing sale of XRP from its escrow wallet allegedly still represents part of the securities offering for which Sostack and co. filed the lawsuit.

Sostack alone in the initial filing claims that he lost $118,100 after buying XRP, following promises by Ripple that the cryptocurrency would increase in value.

 Ripple has until Dec. 4 to respond to the latest filing with an oral hearing scheduled for January. Also, as Jake Chevinsky, General Counsel for Compound Finance, pointed out, the court can take as long as it wants to rule on the matter.


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