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A little-known Puerto Rico-based company has pursued Ripple in court, accusing the blockchain company of carrying out an unregistered security sale of the cryptocurrency XRP.
The company, Bitcoin Manipulation Abatement (BMA), filed a lawsuit on Friday in San Francisco, claiming that both Ripple and its CEO, Brad Garlinghouse, had violated federal and Californian laws on seven counts when they hosted its XRP sale. from $ 1.1 billion.
BMA accuses Ripple of publicly promoting the sale to investors to increase demand and maximize profits, without registering the sale with the relevant regulatory authority. It also claims that the company intentionally tricked investors with fake ads to “artificially inflate the price they can sell XRP at.”
The actor adds that XRP was of no use at the time of the first sale in 2013, with its only value resulting from being a speculative investment, and that the $ 1.1 billion Ripple made from the token sale was higher than the rest. of the combined revenue of the company. and cash flow.
Very little is known about BMA. The company was incorporated in Puerto Rico in March 2019 and has a sole director, Pavel Pogodin, named in the register of companies. It first made headlines after filing a lawsuit against FTX in November, accusing the derivatives exchange of manipulating the price of bitcoin. The case was closed in mid-December.
BMA appears to represent Pogodin. The document claims that he had bought XRP from Ripple but lost money by relying on Ripple’s “false claims” that “the adoption of XRP by financial institutions and banks would drive demand for XRP.”
In addition to requiring Ripple to return all money earned in the illegal sale, BMA is also asking the court to grant “compensatory damages”.
CoinDesk reached out to Ripple for comment but received no response at press time.
This isn’t the first cause Ripple has been selling XRP tokens as unregistered securities. Other investors have accused the San Francisco-based company of breaking California securities legislation.
Ripple unsuccessfully attempted to limit new cases last December, arguing that a lawsuit, filed last August, came too late after the original sale and should, therefore, be dismissed.
