Florida residents have filed a new class-action lawsuit against Ripple for the sale of XRP tokens. They claim the company violated the state’s securities laws.

Tyler Toomey, a Florida resident, filed a new class-action lawsuit against Ripple Labs, its CEO Bradley Garlinghouse, and its subsidiary XRP II, LLC.

Toomey claims that the company sold millions of dollars worth of XRP tokens to Florida investors without registering the digital asset with federal or local authorities. 

The plaintiff maintains that the defendants failed to comply with the state’s securities laws since it is unlawful to sell a security unless it is “exempt [or] registered pursuant to this chapter” under the Florida Securities and Investor Protection Act.

“[Ripple Labs] began their unregistered and unlawful sale of XRP in 2013, despite having knowledge as early as 2012 that XRP could be considered an ‘investment contract’ under federal and, by extension, Florida law. [The company] chose to disregard filing requirements and initiated a vast offering of XRP without registration. Further, [it] made affirmative representations to the investing public that XRP is not a security, when in fact it is,” reads the lawsuit.  

The new complaint comes at a time when Ripple’s legal stability has been shattered after the U.S. Securities and Exchange Commission (SEC) went after it and two of its executives.

The regulatory watchdog also claims that the company raised over $1.3 billion through an unregistered and ongoing digital asset securities offering.

The current fear, uncertainty, and doubt that surrounds Ripple are wearing down XRP.

Although the token continues consolidating within a descending triangle, it seems like support is getting weaker over time. 

A 4-hour candlestick close below the triangle’s x-axis at $0.25 could be significant enough to trigger panic selling among investors. If this were to happen, the odds for a 33% correction would increase drastically, pushing XRP’s market value towards $0.17.

This target is determined by measuring the distance between the widest range of the triangle and adding it to the breakout point.

Nonetheless, Ripple’s support in the Eastern markets could revive investors’ confidence in XRP. A new wave of capital flowing into the token that sends it above the triangle’s hypotenuse at $0.27 might jeopardize the bearish thesis. 

Under such unique circumstances, XRP will have an opportunity to regain lost ground and rise to $0.35. 

Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.

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