Ripple CEO Brad Garlinghouse is set to face trial after being accused of misleading investors with bullish statements about XRP in 2017.
The plaintiffs allege that Garlinghouse shilled XRP to investors while selling millions himself.
This case vastly differs from the ongoing case between Ripple and the SEC.
XRP's price has remained flat so far, but a retest of $0.5 might give the cryptocurrency a chance to break out.
The plot has thickened again in the ongoing legal battle between the SEC and Ripple, the issuers of $XRP.
This time around, Ripple's CEO, Brad Garlinghouse, is set to face a trial for making “misleading statements” during a 2017 interview with Bloomberg, in which he all but shilled the cryptocurrency.
According to the Plaintiffs, Garlinghouse publicly stated that he was 'bullish' on XRP despite selling a considerable amount of his holdings in the same year, raising questions about his intentions when he made those statements.
Here are all the details of the incoming trial.
One of the core pillars of the trial is Garlinghouse’s interview with Canada’s BNN Bloomberg in 2017.
The Ripple CEO reportedly stated that he was “very, very bullish” on XRP, which was miles different from his actual selling of millions of XRP, that same year.
During the trial, Garlinghouse will be examined based on the differences between his words and his actions. Prosecutors claim that his statements could have influenced XRP investors, who might have been misled into buying.
During the interview, Garlinghouse reportedly stated:
"I'm long XRP, I'm very, very long XRP as a percentage of my personal balance sheet. . . . . [I am] not long on some of the other [digital] assets because it is not clear to me what's the real utility, what problem are they really solving . . . if you're solving a real problem, if it's a scaled problem, then I think you have a huge opportunity to continue to grow that. We have been really fortunate, obviously. I remain very, very, very long XRP, there is an expression in the industry HODL, instead of hold, it's HODL… I'm on the HODL side."
It is also important to note that this case differs from the ongoing battle between Ripple and the US Securities and Exchange Commission over whether or not XRP should be regarded as a security.
Recall last year when US District Court Judge Analisa Torres ruled that XRP didn't satisfy all the criteria of the Howey Test and that the cryptocurrency didn't serve as a security when sold to retail investors.
Later in the year, however, District Judge Jed Rakoff dismissed Torres' ruling in a separate case between the SEC and Terraform Labs, indirectly reclassifying XRP as a security.
Judge Phyllis Hamilton threw Judge Analisa Torres' initial ruling further out the window earlier in the week, ruling that XRP sold to non-institutional "programmatic" dealers was, in fact, a security.
She addressed one of the crucial components of the Howey Test and emphasized that the traders who bought XRP back then expected rewards from the labor of others.
To this end, XRP remains a security.
Overall, the XRP community continues to await the next phase of the ongoing lawsuit(s), and Chief Legal Officer Stuart Alderoty remains confident.
Alderoty said in a recent tweet, "The plaintiff -- who didn't buy directly from Ripple and can't say if he even heard the statement before he traded -- allegedly lost a couple hundred $. We look forward to that cross-examination."
According to the charts, XRP has remained relatively stagnant and is only up by around 1% in the last week before writing, as shown in the snapshot below:
XRP’s price
In the charts, we can see that XRP continues to consolidate within the ascending triangle below and should remain stable as long as we don't see a valid break below $0.45.
XRP’s price action
XRP is set to retest the $0.5 zone again very soon, and depending on how hard the bulls can push the cryptocurrency, we might see a breakout that takes things up to the vital $0.73 resistance for a start.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.