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Ripple is staring down the barrel of yet another securities lawsuit — its third one this year.

Filed in the Superior Court of the State of California in San Mateo County, the class action alleges that Ripple and its team illegally sold and promoted XRP, Ripple’s currency, as an unregistered security.

The suit’s plaintiff, David Oconer, is demanding that the court classify XRP as a security, while also seeking relief for the “damages, recession” that he incurred from investing in the coin.

“This is a securities class action on behalf of all California purchasers of Ripple tokens (“XRP”), brought against Ripple, XRP II, and the Chief Executive Officer (“CEO”) of the company, Bradley Garlinghouse (“Garlinghouse”), who promoted, sold and solicited the sale of XRP. Defendants raised hundreds of millions of dollars through the unregistered sales of XRP, including selling to retail investors, in violation of the law,” the class action’s complaint reads.

The document argues that Ripple never registered with California’s Commissioner of Corporations for qualification, a mandatory registration for any securities offering in the state. From here, the plaintiff outlines his rationale for XRP’s security classification, namely that Ripple’s sale of XRP in a “never-ending initial coin offering” resembles that of an IPO, with the currency itself acting like a dividend for the ROI its promotion promised to investors.

On top of this, the plaintiff argues that Ripple is highly centralized and that its team has used their control over XRP’s supply and distribution to leverage the asset’s price. Specifically referring to an instance where the Ripple team locked 55 million XRP into an escrow account last December, the suit claims that Garlinghouse and others advertised the lock-up as having price-positive ramifications for the asset.

“The fact that the vast amount of existing XRP resides in the control of defendants further demonstrates the high degree of centralization and control defendants maintain over XRP, as they can determine the supply of XRP, which will, in turn, impact the price of the security,” the court document states.

Retracing Familiar Ground

Investors have been putting Ripple on the hot seat this summer. This securities class action marks the third of the season, as a succession of investor-led lawsuits are becoming a monthly occurrence for the industry’s top third asset by market cap.

The first of these came in May and, like the most recent one, it alleges that Ripple sold and promoted XRP like a security, conducting an endless ICO that allowed its team to reap mass profits. Another suit filed last month reiterates these allegations.

All three lawsuits go to lengths to stress Ripple’s control over XRP’s distribution. According to the class action suit, not only does this manipulate supply and price as a result, but it also conveys that, contrary to other popular currencies like bitcoin and ether, XRP is highly centralized.

This argument carries additional weight in light of U.S. Securities and Exchange Commission (SEC) Director William Hinman’s comments that ether and bitcoin are not securities. Alluding to ether during his speech, Hinman indicated that a coin or token may be sold as a security but, after it has become sufficiently decentralized in governance and management, it may be retroactively declassified as such. Given this analysis, Ripple, whose foundation and founders collectively own more than half the supply of XRP, may fall into the SEC’s classification as a security for its centralized structure.

During his speech, Hinman made no comment regarding XRP.

This article originally appeared on Bitcoin Magazine.

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