XRP Investors Take Legal Action Against SEC Over Ripple Lawsuit

Petitioners claim the SEC harmed investor interests by declaring XRP a security asset.

Key Takeaways

XRP holders have filed a petition for a writ against the acting chairman of SEC, Elad Roisman, on Jan. 1 in the U.S. District Court of Rhode Island.

The petition calls into question SEC’s fiduciary duties and alleges that the agency harmed investors’ interests by declaring XRP a security seven years after its initial distribution.

XRP holders have filed a petition on Jan. 1, 2021, in the U.S. District Court of Rhode Island alleges that the U.S. Securities and Exchange Commission (SEC) failed to protect investor interests’ by declaring XRP a security.

XRP Holders Say SEC Failed Them

A group of XRP holders has filed a petition for a writ against the SEC’s acting chairman, Elad Roisman.

The petition alleges that the SEC harmed investors by declaring the token a security in its legal action against Ripple. On Dec. 22, the Commission announced in an official complaint that Ripple sold unregistered securities to investors in the form of XRP.

Meanwhile, numerous U.S.-based cryptocurrency exchanges have halted or suspended the token trading, causing the asset’s price to tumble.

“The Writ is asking the SEC to exclude calling our XRP securities,” said the lead petitioner and XRP holder, John E Deaton.

The petitioners further argue that declaring the token a security seven years after the first distribution calls into question the SEC’s exercise of its discretion.

The petition states that SEC ex-chairman Jay Clayton was publicly asked about the agency’s stance on XRP on many occasions. However, the chairman did not provide clarity in time.

“As chairman of the SEC, it was Jay Clayton’s (Clayton) fiduciary duty to enforce the SEC mission statement. Instead of protecting investors and sharing information to help investors make informed decisions, the Respondent [SEC] knowingly and intentionally caused multibillion-dollar losses to innocent investors,” reads the petition. 

If granted, the writ will attempt to prevent SEC’s continued action over the legal status of token.

For the Commission’s part, the Southern District of New York has scheduled to begin legal proceedings between SEC and Ripple, the issuer of XRP, in February.

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Source: cryptobriefing.com