Talks about Ripple being a scam pop up every now and then. The altcoin’s runner, Brad Garlinghouse even had to handle several lawsuits concerning registration problems. Nevertheless, XRP remains the third-largest by market cap.
First discussions about Ripple’s legitimacy were triggered by its partially centralized nature, allowing for the possibility of manipulation. As Forbes reported back in 2019, XRP’s value was based on a pump and dump scheme, where price volatility was artificially decreased or increased.
For this reason, some community members have even expressed the idea that the project was a scam. In Reddit, a user with the nickname Collector warned the community against dealing with the altcoin, claiming that it is “more controllable than fiat”. The same aim is pursued by the Twitter community called “The XRP Scam reality”, which gathers bad news about XRP, allegedly to prove the altcoin is not legitimate.
Actual legal issues
Meanwhile, Ripple seems to have legal problems as the company deals with several lawsuits concerning various issues including registration violation and trademark infringement.
Since 2018, Ripple Labs has been battling with the case legally filed by Simmons. The plaintiffs led by Bradley Sostack are accusing Ripple Blockchain Network and its CEO, Brad Garlinghouse, of deception as well as failing to lawfully register the sale of XRP cryptocurrency according to the US securities Acts.
However, Ripple’s lawyers have come out to counter accuse the plaintiff led by Sostack claiming that they have not managed to produce enough and verified evidence to prove how the firm’s employees including the CEO reportedly participated in the scam of trading XRP as an unlicensed security. In February this year, the charges for false and spurious ads were later abandoned (causes 6 and 7) by Judge Phyllis J Hamilton. Ripple is asking for these scam accusations to be abandoned with prejudice.
Besides litigation over registration, Ripple now also has to deal with a lawsuit over trademark infringement. The case against Ripple was officially filed before New South Wales Registry in the FCoA on August 20, by The New Payment Platform (NPP), an Australian payment innovation company, for violating, infringing and riding roughshod over its trademark right. However, more details of this trademark infringement wait to be known.
If at all the charges are dropped or the court decides that XRP is a security, the public would love to see whether or not the Ripple Blockchain will have to first apply for an authorization to allow it go ahead and sell the XRP tokens.
But even when the safety and legal aspect of Ripple is still being uncertain, XRP is being ranked among the top 5 cryptocurrencies by market cap and is trading at about $0.26, with a market cap of $12.14 billion and volume of $1.17 billion, according to the data by Coinmarketcap. Therefore, it means that Ripple altcoin still has enough support from the community despite all the bearish news and sentiments in the market.