Ripple Scores Minor Victory in US Securities Class Action

A judge has ruled that an ongoing class action lawsuit against Ripple must remain in federal court, potentially giving the payments firm a slight advantage going forward.

U.S. District Judge Phyllis Hamilton, of the Northern District of California, ruled Thursday that a class action lawsuit filed against Ripple and affiliated subsidiaries and individuals would not be shifted back to lower courts after lawyers for the company first moved to district court last year.

Chervinsky agreed, noting that "Ripple fought hard" to keep the case at the federal court level.

The case centers around XRP. The plaintiffs in the case allege that Ripple issued the cryptocurrency as an unregistered securities offering, a claim Ripple has frequently denied.

Ripple Labs, its subsidiary XRP II, CEO Brad Garlinghouse and a number of other individuals have been named as defendants in the case.

If a judge rules against such a motion, or if Ripple decides not to file one, the plaintiffs can then file for class certification.

Chervinsky explained, "The lawsuit is styled as a class action but technically does not become one until and unless the Court grants a motion for class certification."

Ripple and the plaintiffs may choose to settle the case, though Chervinsky does not believe this can happen in the immediate future due to procedural roadblocks.

"As a result, there isn't much incentive for Ripple or the plaintiffs to settle the case before the class certification stage," Chervinsky said.

The plaintiffs have 30 days to file an amended consolidated complaint, while Ripple has 30 days to file a motion to dismiss or notify the court that it does not intend to do so.