Ripple files motion to dismiss lawsuit and confirm it is ‘not a security’

Ripple has filed a motion to dismiss a lawsuit alleging that the XRP token is a security.

In May 2018, a group of XRP investors filed a lawsuit against a number of Ripple executives with claims that they had breached securities laws.

The group amended the complaint in August with new information that labelled XRP tokens as unregistered securities in relation to the SEC’s new guidelines.

Ripple’s 37-page response stated that “purchasing XRP is not an investment”.

The filing continued: “There is no common enterprise between Ripple and XRP purchasers; there was no promise that Ripple would help generate profits for XRP holders, and the XRP Ledger is decentralised.”

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Ripple also argued that it did not sell XRP tokens to the aggrieved group directly.

“Countless other XRP holders in addition to Defendants (including Plaintiff) sell XRP on exchanges, making it impossible to plausibly conclude that Plaintiff purchased an initial distribution of XRP from Defendants,” the company said.

Three weeks ago, Ripple CEO Brad Garlinghouse hit back at critics of XRP, stating that “it is not a security” and that it “continues to set industry standards in reporting and transparency (one example is our quarterly markets report)”.

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