Judge Greenlights Civil Securities Lawsuit Against Ripple Labs

A United States federal court judge has allowed a civil securities lawsuit against Ripple Labs to proceed. The case alleges that Ripple CEO Brad Garlinghouse violated California securities laws. California District Court Judge Phyllis Hamilton denied Ripple’s summary judgment bid on June 20, meaning a jury will determine if Garlinghouse made misleading statements in a 2017 interview. However, the court dismissed four allegations related to Ripple’s failure to register XRP as a security.

The lawsuit claims Garlinghouse’s statements during a 2017 interview on Canada’s BNN Bloomberg were misleading. He stated he was “very, very long” on XRP while allegedly selling millions of XRP throughout that year. Judge Hamilton noted that Ripple argued for dismissing the misleading statement claim, asserting that XRP is not a security under the Howey test. 

This argument referenced a landmark ruling by Judge Analisa Torres in a 2023 SEC lawsuit. However, Hamilton found that XRP could be considered a security when sold to non-institutional investors. She stated that these investors might have expected profits from Ripple’s efforts, aligning with the Howey test’s criteria.

Judge Hamilton’s order emphasized that a reasonable investor might have anticipated profit from Ripple’s activities rather than general cryptocurrency market trends. Therefore, the court could not determine as a matter of law that Ripple’s actions would not lead an investor to expect profit due to others’ efforts. 

However, recent analyses reported by CryptoTale suggest a potential bullish breakout for XRP. According to Egrag Crypto, the token’s price trajectory shows promising indicators. Notably, two hammer candles were formed in the 3-month time frame before major price increases. These formations were seen in April-June 2016 and July-September 2017, leading to significant price surges.

Currently, XRP needs to close above $0.55-$0.58 within the next 10 days to form another perfect hammer, potentially triggering a massive rally. If successful, Egrag Crypto predicts a possible 1700% increase, pushing XRP’s price to around $8 by July 2024.

As of today, XRP is priced at $0.4893, with a 24-hour trading volume of $912,173,130.48. The price reflects a 1.13% decline in the last 24 hours and a 1.8% increase in the past week. With a circulating supply of 55 billion XRP, the token’s market cap stands at $27,210,316,327.