Ripple is set for new legal battles after a US judge in California approved a lawsuit against the crypto company regarding alleged misleading statements by its CEO, Brad Garlinghouse. This means the case would go to trial, and a jury would decide if the Ripple boss had misled investors into investing in the digital asset via a televised 2017 interview with the Business News Network.
Ripple attempted to dismiss the “misleading statement” claim by arguing that XRP was not a security. However, Judge Phyllis Hamilton noted that while XRP may not be classified as a security, it could still be considered one when sold to non-institutional investors. The judge highlighted that investors’ expectation of profit could render XRP a security, aligning with one of the parameters of the Howey Test.
This case stands out as it could set a precedent for how digital assets are classified legally. Ripple’s efforts to promote XRP for cross-border payments and other uses could influence future regulations in the crypto industry. The trial’s outcome could have significant implications for the broader digital asset market, potentially shaping investors’ expectations and regulatory approaches.
For more details, read the full article on CryptoSlate.
