This week, Ripple got hit with another lawsuit from a disgruntled investor. This time, the lawsuit comes from the mysterious Bitcoin Manipulation Abatement (BMA). According to the filing, the group alleges Ripple undertook in the unregistered sale of securities when it offered XRP during its $1.1 billion ICO.
Interestingly, the plaintiff filed the lawsuit in San Francisco. The new suite includes both Ripple and its CEO, Brad Garlinghouse. This latest case comes on the heels of a refiling of a previous unrelated case in which another group of investors claimed similar allegations against the company. The group was so adamant about receiving lost funds that they even filed an amended case that was to kick in, just in case XRP is not found to be a security by regulators.
7 Counts – BMA
Notably, this suit claims that Ripple violated federal and Californian laws on no less than seven counts. Aside from the sale of unregistered securities sale allegations. The case says the firm misled investors with false announcements. Specifically, BMA claims the company pushed a narrative of speedy adoption of XRP by financial institutions and banks. In turn, this would drive demand for XRP.
BMA believes the firm’s announcements were designed to artificially inflate the price of XRP. The suit states that the final goal was to drive up demand and maximize profits. The firm also argues that XRP had no utility at the time of the first public sale back in 2013.
BMA claims XRP is a speculative investment and now is requesting Ripple return all the funds gained during its ICO. In addition to reimbursing investors, the BMA seeks compensatory damages for their suffering. Notably, the group pointed out that Ripple gained more funding during the ICO than the firm’s entire net worth. In fact, the ICO secured more funding than the company’s combined revenue and cash flow by a long shot.
Bitcoin Manipulation Abatement (BMA)
Little is known about the secretive BMA. The group incorporated in Puerto Rico back in March 2019. Not too long afterward, the company filed a suit filing a suit against FTX. In this claim, the group accused the derivatives exchange of manipulating the price of bitcoin. Not surprisingly, the case was thrown out.
The lawsuits keep coming for Ripple as more investors vent frustration with the firm. The company continues to fend off the SEC in another case that points to centralization as another problem with the company. This case stems from alleged evidence that Ripple artificially limited the number of tokens to drive the price up. The case also states that Ripple paid exchanges to list the token.
Cloudy Days Ahead for XRP
It’s sad to see Ripple going through so much at the moment. The firm has had a magnificent start including some huge partnerships. Hopefully, the company’s legal woes will subside and the group can get back to building a reliable bank-focused blockchain solution.