Ripple has been hit by a new lawsuit once again.

This time, the lawsuit was filed by the company “Bitcoin Manipulation Abatement, LLC.” As for the substance of the lawsuit, it was filed against Ripple and its CEO, Brad Garlinghouse, for violating securities laws related to the sale and marketing of XRP.

The lawsuit alleges that Ripple created the XRP cryptocurrency with the sole purpose of making its founders and a few people rich.

The lawsuit was filed Friday in a Northern California District Court, and the lawsuit also states that XRP was marketed to the public to raise more than $1 billion.

In order to increase demand, Ripple made a series of false and misleading statements regarding XRP, according to the lawsuit.

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Odd Plaintiff:

The lawsuit against Ripple was filed by attorney Pavel Bogodin through his firm located on Verde Island, Puerto Rico.

As for the person behind the lawsuit, it is Bitcoin Manipulation Abatement LLC, an entity that has almost no online presence.

According for public recordsThis company was created in March 2019 with Bogodin appointing himself as the Resident Agent.

Earlier today, Stephen Paley, a partner at law firm Anderson Keel, told mocking the lawsuit and how the attorney was appointed as a means of litigating the charge.

Interestingly, Bitcoin Manipulation Abatement LLC was also behind a lawsuit filed in November against the crypto derivatives trading service FTX.

But that lawsuit, which demanded $150 million from the platform in punitive damages, was dismissed a month later.

Ripple is facing multiple class-action lawsuits from California investors seeking damages over the company’s alleged failure to register XRP as a security with the SEC and provide the public with the company’s documentation.

This new lawsuit reiterates many of the same allegations previously made against Ripple.

Is XRP a security currency?

The new complaint claims that XRP is a security currency because buyers have been led to believe they can expect a profit and are told that XRP will be an asset for long-term growth.

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The law firm also asserts to the plaintiff that XRP is not a currency because there are no products or services that can be purchased with XRP.

Unlike other decentralized cryptocurrencies such as Bitcoin and Ethereum, which are mined by a decentralized network, all of the 100 billion XRP were created in a centralized manner, without incurring any significant costs from Ripple in 2013, according to the complaint.

The complaint adds that at the time, 20% of the total XRP supply was given to the founders, while the other 80% was held by Ripple itself.

Those 80 billion XRP were put in escrow, which Ripple has claimed in the past that they can’t touch.

But a portion of XRP is released from escrow every month, and Ripple, in the past, has been selling XRP to cryptocurrency exchanges. (This practice was discontinued last year.)

The complaint says:

The defendants have since made huge profits from selling XRP to the general public, through several offerings, selling $1.1 billion in XRP to retail clients in exchange for cryptocurrencies mostly in exchange for Bitcoin and Ethereum.

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The complaint goes on to assert that Ripple’s only value proposition as a company is based on promoting XRP and that investors are buying the coin in anticipation of making a profit.

Ripple has in the past vigorously denied similar allegations.

In March of last year, David Schwartz, technical director of Ripple, took up the defense and argued that XRP is not a security currency.

The US Securities and Exchange Commission has not yet taken a position on whether XRP is a security or not

Read also:

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