Over the past few years, XRP has grown into the third-biggest cryptocurrency by market cap, and much of the credit for that goes to the company Ripple. The company holds the highest number of XRP tokens, and as a result, its activities have a direct impact on the price of the token. Over the course of September, the San Francisco startup has come under a lot of pressure from the XRP community due to the high volume of tokens it’s been selling.
In a new development, the company has now decided to file a motion in order to dismiss a lawsuit that alleges that it violated securities law in the United States. The violation pertains to its act of selling XRP tokens.
Many members of the XRP community have claimed that the token has performed poorly throughout the year because of the fact that Ripple had sold billions of tokens every quarter. The company’s Chief Executive Officer Brad Garlinghouse had earlier dismissed the allegations and stated that the sales were meant for further developing the XRP ecosystem. In its motion to dismiss the lawsuit, the company stated that the case had not been brought within three years of XRP having its initial coin offering. Hence, the statutes of limitations have expired.
However, along with the standard legalese in the motion to dismiss, the company also stated that XRP is not a security and hence, purchasing it does not mean that an investor has entered into an investment contract. In the motion, the company stated, “Purchasing XRP is not an ‘investment’ in Ripple; 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 decentralized.” It is a telling point and one that could give Ripple a massive advantage if the lawsuit ever goes to trial.
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