The Ripple Team has reportedly gained a minor but meaningful victory in its quest to prove that the XRP token is not a security under U.S state laws.
A recent ruling by a Federal Court Judge denied a request filed by Ripple’s plaintiffs to move a case challenging XRP's 'security' status back to a State court. That means that the case will ultimately be decided at the Federal court, a factor that could eventually help Ripple’s quest.
The court cited that the rejection to heed the plaintiffs' request is because of precedents set last year when other three different plaintiffs applied to remand a case involving Ripple to the State Court.
Specifically, the ruling mentioned that one of those plaintiffs had voluntarily withdrawn the lawsuit, while one out of the remaining two was reverted to the State Court for very peculiar reasons.
As Stmarket.co reported when the case was moved to the Federal court, the current situation favours Ripple Labs who believe that State judges are more favourably disposed towards plaintiffs and as such could decide for them.
An Overview of Ripple’s Lawsuit
Ripple’s opponents think that the XRP token is security and should be registered with regulators as one. These accusations are on the basis that the Ripple Team controls a large portion of the token’s circulating supply and could pump or dump prices at will.
Ripple on the hand argues that the claims are not true, because even though the team held a more significant chunk of the token, price actions are influenced by mainstream investors just as in other cryptocurrencies like Bitcoin and Ethereum.
The project currently faces some lawsuits for the earlier accusations with one the former plaintiffs explicitly claiming that he lost a lot of money because the Ripple Team manipulated the price of the token.
The Federal court’s final decision about XRP’s status as “security” will have a massive effect on the future of the Ripple project. The startup’s solution is simplifying cross-border payment for financial institutions.
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