The Ripple class action brought by Bradley Sostack in the United States District Court of Northern District of California was recently consolidated with a new proceeding brought by Bitcoin Manipulation Abatement LLC (BMA).
The new proceedings brought by BMA, a company incorporated in the Puerto Rico, relates to the original Ripple offering and alleges that Ripple tokens were sold as unregistered securities. The action has now been consolidated by Judge Phyllis J. Hamilton due to the significant time and labour required by the Courts to address what has been described as the "novel and nuanced" issues in the cases.
Judge Hamilton said:
Relating the BMA action to this action would avoid the duplication of labor ... Plainly, a core contention at issue in this litigation - whether XRP qualifies as a security under federal and California state law - is novel and nuanced. While the court is less concerned about potentially conflicting results, its determination of that core contention, in addition to that of the other questions presented in this action, will require significant labor.
In March 2020, a motion by Ripple to dismiss Mr Sostack's proceedings failed before Judge Hamilton, with the Judge finding there was a sufficient basis for the allegation that Ripple's XRP digital currency was an unregistered security under US law.
It will be interesting to see how Ripple manages the PR risks given the lawsuits against it, together with Ripple's own proceedings against Youtube for alleged harm to Ripple's reputation by YouTube failing to address fraud on its platform in relation to the original offer of XRP.