XRP Investors File Class Motion Lawsuit Against Coinbase

Other than the court battle between Ripple and the US Securities and Exchange Commission, the airdrop of the Flare Network Token (FLR) has caused quite a stir within the XRP community in recent weeks. After greater than two years, XRP holders finally received their FLR tokens on January 9, 2023, even when not completely as hoped, as Bitcoinist reported.

Essentially the most renowned exchanges like Binance and Kraken have supported the distribution of the airdrop, though there’s one exception: Coinbase. The American exchange has not distributed the FLT to its users.

However the XRP community around lawyer Frederick Rispoli doesn’t accept this and has brought a category motion lawsuit against Coinbase and its CEO Brian Armstrong.

Lead plaintiff Dallas Woody is represented by the law firm Hodl Law, which, led by Rispoli, filed the lawsuit yesterday in United States District Court. Hodl Law’s Twitter account posted this:

A crypto company can’t steal customer funds. That’s Business Law 101. Even after FTX, some exchanges still haven’t got the message…because they weren’t being held to account. That’s over. Coinbase. Return customers’ SGB and FLR, with damages, now. 

Now we have filed a category motion lawsuit against Coinbase for its failure to supply their customers with Songbird and Flare tokens that Coinbase publicly affirmed it might distribute. No more excuses.

XRP Hodlers Sue Coinbase Over FLR Airdrop

The grievance alleges that the crypto exchange publicly agreed to distribute the airdrop amongst XRP holders. Coinbase’s repeated and public assertions have caused XRP holders to moreover purchase XRP from the exchange, hold it within the defendant’s custody, and/or transfer XRP from other wallets into the defendant’s custody, in response to the grievance.

Based on the infringement, the plaintiffs assert civil claims against Coinbase for breach of fiduciary duty, fraud (intentional misrepresentation), negligent misrepresentation, constructive fraud, conversion, common count, negligence, violation of unfair competition law and request for declaratory relief.

Also a part of the lawsuit are the Songbird (SGB) tokens, which were distributed as a part of the airdrop from the Flare Network in September 2021 as a precursor to the FLR distribution.

In consequence of Coinbase’s illegal actions with respect to SGB and FLR, Hodl Law, on behalf of the proposed class of all Coinbase customers with XRP accounts, seeks a declaration that the XRP holders are the rightful owners of SGB and FLR that Coinbase received and didn’t distribute.

As well as, Rispoli seeks damages for losses incurred consequently of defendants’ illegal conversion of plaintiff’s SGB and FLR.

This claim can also be asserted against Coinbase CEO Brian Armstrong for having “the facility and authority” to direct the management and activities of Coinbase and its employees and to cause Coinbase to distribute the tokens:

Defendant Armstrong had consistent and day by day management of operations of Coinbase , including the choice to simply accept all SGB and FLR from the Flare Airdrop on behalf of his customers […]. Armstrong purposefully exercised his power and influence to cause Coinbase to have interaction within the wrongful conduct described […].

At press time, the XRP price was at $0.3896, consolidating below the resistance are at $0.41.

XRP price is consolidating , 1-day chart| Source: XRPUSD on TradingView.com

Featured image from Kanchanara / Unsplash , Chart from TradingView.com

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