Blockchain company, Ripple issued a debatable motion to cease further hearing of a lawsuit that claimed it violated the U.S laws by selling unregistered securities.
In the court filing published on September 20, the attorneys representing Ripple denied the securities allegations presented by the plaintiffs which it claimed were mainly people who bought XRP near the top of the 2017 bull market.
However, rather than address the opposition’s claim that XRP is a security, the attorneys, stressed more on the fact that the Lead plaintiff, Bradley Sostack, does not have the standing to file a complaint.
For instance, the filing argued that the statute of repose, that is, the three year period during which it was legally binding for Sostack to file a complaint has elapsed. Given that Ripple’s initial offering had taken place in 2013, the statute of repose period expired in 2016 or at worst in 2018, three years after Ripple last sold XRP to the general public.
The attorneys also argued that Sostack did not “plausibly allege” that he bought the coins directly from Ripple during the initial offering, a fact that infers he got them through a secondary exchange, likely not affiliated with the Ripple company which he filed a lawsuit against.
On the ‘Security’ Allegations
While Ripple attorneys may not have provided a lengthy response to allegations that XRP is a security under U.S laws, the latest filing sought to defend in simple terms why they disagree with the opposition.
As Coinfomania had reported, the amended complaint filed by Sostack and other plaintiffs on August 14, labeled XRP as an unregistered security, alleging that the tokens must be registered as securities with the U.S Securities and Exchange Commission (SEC).
However, Ripple attorneys argued in today’s filing that “Purchasing XRP is not an ‘investment’ in Ripple.”
“There is no common enterprise between Ripple and XRP purchasers; there was no promise that Ripple would help generate profits for XRP holders, and the XRP Ledger is decentralized,” today’s filing reads.
Another section noted that the coin could not also be a security under the law “because XRP is a currency,” thereby dismissing allegations that Ripple’s massive control of the majority of market share, influences the coin’s performance.
The attorney’s further pleaded in the filling that there is no need to “resolve whether XRP is a security or currency for purposes of this motion, which assumes the Plaintiff’s allegation that XRP is a security.”
Instead, they advised the presiding judge to dismiss the case without allowing Sostack to amend it for re-filing. Such “amendment would be futile,” Ripple attorneys wrote.
Meanwhile, a hearing on the matter has been scheduled for next year (January 15, 2020), as per the filing while the case may as well be waived if settlement talks take place between the opposing parties.