Ripple files ‘Notice of Removal’

Ripple vs XRP

Before we delve into this article, a distinction must be made.  Ripple and XRP are two different things.

Ripple

• A software company that has developed a platform known as xRapid
  • This platform uses XRP and its associated blockchain to function

XRP

• An open source cryptocurrency
  • Primarily owned by Ripple, however it remains purchasable by anyone

This is what Ripple would have you believe – and it very well may be the case.  However, when an entity owns the overwhelming majority of a particular asset, at what point do they cease to be separate.

The Case

The issue at hand is whether or not Ripple acted as an unlicensed security broker, and sold XRP as a security.
Over 100 individuals have claimed that they were unaware of the distinction between Ripple and XRP, and that they believe they were sold a security.  They believe that Ripple marketed XRP as an investment, and made millions off the back of investors.

With the massive decline seen throughout the market this past year, those invested in XRP are angry, as Ripple has not been held accountable for the state of the coin.  The result is this lawsuit, which sees the plaintiffs asking for over $160 million in damages.

The Move to Federal

Those defending Ripple have filed a motion to have the case moved, from state court to a federal one.  They wish to do so on a variety on basis.

• Size of the claim
• Number of plaintiffs
• Geographical location of plaintiff’s range outside of the state

It is believed that the Ripple team wants to be tried before a federal judge due to a perceived higher chance of winning their case.  This better chance is thought to be due to two main reasons.

• State Courts have local jurys that often side with the defendants that are viewed as ‘locals’
• Judges are often elected, rather than appointed.  Some believe this may skew their verdicts, as politics will play a role in their decision.

As of now, the case has not officially been moved to federal court.  If the ‘notice of removal’ is successful, and the move does occur, only time will tell if the strategy is sound.

Market Dominance

Despite the on-going struggles of XRP, the coin has fared well with their respective market dominance.  In recent weeks, we have seen the coin surpass Ethereum as the second largest cryptocurrency on multiple occasions. 

Coinbase Hesitant?

Although XRP enthusiasts have been calling for Coinbase to list XRP on their platform for years, it is believed that Coinbase is hesitant to do so.  It is reasonable to believe that this hesitancy stems from the on-going case regarding the security status of XRP.  With Coinbase actively looking to expand their offerings, they will surely list XRP once more clarity is afforded to the situation through either the SEC or this court case.