Ripple Labs could face further class action lawsuits after the California court ruling
It looks like more problems are brewing on the horizon for Ripple Labs. In fact, according to a California District Court ruling, we could see a huge “boom” in class action lawsuits across the crypto space.
Ripple Labs could deal with several lawsuits
Since the SEC began cracking down on ICOs for illegal securities offers, most companies that offer cryptocurrencies have defended their tokens. However, as a California district court has shown in the case against Ripple Labs, non-classification as a security can have even more serious consequences.
If cryptocurrencies such as XRP are not securities, the court ruled that state and federal laws may apply to unfair, misleading, or abusive acts or practices (UDAAPs). This also includes the California law against unfair competition.
The classification of tokens as securities has so far mainly resulted in out-of-court settlement penalties, with a few exceptions, in particular the SEC vs. case. Telegram that has not yet been completed. However, if the UDAAP laws apply instead, the situation for companies that violate the laws will be significantly more expensive.
We're not talking about the SEC filing a lawsuit. Anyone could file a lawsuit against a company for unfair practices.
The decision of the court in the Ripple case is of great importance. If, as many claim, cryptocurrencies are not securities, they are likely to be subject to UDAAP laws. And, as discussed above, putative class actions based on alleged UCL violations are among the most common and expensive types of lawsuits.
With Ripple Labs' decision, there could be a significant increase in putative class action lawsuits targeting the crypto industry, especially those based in California, which could be costly and costly to defend against. With so many ICOs that could easily be classified as “unjust” or “misleading”, the decision of the California court can have costly consequences.
Proof of text: bitcoinist
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