Ripple’s lawyers filed an amendment to a motion to dismiss the securities-law suit. In their view, the plaintiff failed to prove the falsity of the statements made by the company and its CEO Brad Garlinghouse regarding XRP during the token sale.
470977069-July-29-Filing by ForkLog on Scribd
The document published by Law360 states:
«In short, the plaintiff does not offer a theory of the complaint that explains in what statements by Ripple and Garlinghouse they were false. Instead, the plaintiff asks the court to ignore the requirements of Rule 9(b). He makes ‘unsubstantiated logical leaps’ based on facts that were not previously presented».
To support their position, the lawyers highlighted specific statements by plaintiff Brad Sostak. They cited his claim that “XRP has no utilitarian purpose,” since the token was not used for cross-border settlement in 2017. In the lawyers’ view, the former does not follow from the latter, and “the usefulness or use of the product does not depend on its broad adoption at the moment”.
Company representatives also argue that Sostak failed to explain why any alleged misstatements made by Ripple or Garlinghouse would actually be such. In their view, the plaintiff does not provide justifications and facts that “would show why Garlinghouse’s statements could have misled the public”.
«The plaintiff already had two opportunities to present full fraud evidence, but he is seeking a third», Ripple noted, adding that on this basis the request should be denied.
A revised version of the complaint, in which arguments are presented that the company violated securities laws in the process of selling XRP tokens, was filed in August 2019. In June, Ripple representatives filed a motion to dismiss, noting that it was based on misleading information.
In May, another lawsuit against Ripple and its CEO Brad Garlinghouse with similar allegations was filed. The company behind it, Bitcoin Manipulation Abatement LLC, had also sued the cryptocurrency derivatives exchange FTX in November 2019, and in June 2020 — BitMEX.
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