Major Setback for XRP Holders As Lawsuit Seeking to Prove Token Is a Security Carries On

A class action lawsuit brought against Ripple four years ago by investors who claim that XRP is a security is set to continue.

On Wednesday, Crypto Law, a regulatory news website for digital assets, provided the update noting that a hearing on the case will take place on April 26 in a California federal court where parties in the Zakinov v. Ripple lawsuit will be heard.

The website further noted that only 500 members of the public should be allowed online access to the proceedings. As per the announcement, “the hearing is for oral arguments on the question of certifying the class of XRP holders suing Ripple.”

Background to the Lawsuit

The lawsuit was brought against Ripple and Brad Garlinghouse, the CEO of Ripple, by the plaintiff in 2019, Vladi Zakinov, and two other individuals through investor Bradley Sostack, the lead plaintiff in the consolidated lawsuit.

As per the plaint, Vladi Zakinov sued the defendants claiming that XRP is an unregistered security, after suffering a considerable loss from the sale of XRP in January 2018. The plaintiff also sought to ratify the case into a class action lawsuit that generally included all persons or entities who purchased XRP. However, the defendants maintained that XRP is not a security asking the court to dismiss the claim. 

As per the announcement by Crypto Law, today’s hearing will be for oral arguments on the question of certifying the class of XRP holders suing Ripple.

“The plaintiff, Bradley Sostak, who owned XRP for two weeks, is asking to be lead plaintiff in the class and is asking to represent all XRP holders who either owned it and sold it at a loss or own it today,” Crypto Law wrote.

Meanwhile, John Deaton, who had previously filed an amicus brief on behalf of 75K+ XRP holders in the case, commented that he intends to follow the proceedings, although his motion is yet to be ruled on.

Ripple’s Battle With The SEC

That said, as Ripple battles out the case, the community is still focused on what will come from the firm’s parallel battle with the SEC. With most of the briefs finalized now, it is expected that Judge Analisa Torres could deliver a summary judgement soon.

Meanwhile, the ongoing legal battles have increased dilemmas among investors torn between selling their holdings or waiting for the ruling. Nonetheless, with SEC’s apparent onslaught on the crypto sector despite the lack of sufficient regulations, most observers believe Ripple could bag a win, helping XRP to break new ground.

At press time, XRP was trading at $0.47, up 3.26% in the past 24 hours, as per CoinMarketCap data.