A little-known Puerto Rican company, Bitcoin Manipulation Abatement (BMA), has filed a lawsuit against Ripple, accusing the blockchain firm of breaking rules when it ran a recent securities sale, CoinDesk reported.
BMA, of which little is known, filed a lawsuit in San Francisco alleging that Ripple and CEO Brad Garlinghouse didn’t register the company’s latest $1.1 billion XRP sale with the relevant authorities. It also said that Ripple publicly promoted the sale to investors to garner more profits.
The firm also alleged that Ripple purposefully misrepresented its sale in order to puff up the price at which it could sell XRP.
According to BMA, Ripple didn’t have utility when it first sold XRP in 2013 — its sole value came from a speculative investment, and the $1.1 billion sale now is more than it had in any assets otherwise.
BMA is asking the court to force Ripple to return all money from the sale. The firm also wants the court to award “compensatory damages.”
Ripple did not have a comment on the allegations, according to CoinDesk.
BMA was founded in March 2019 in Puerto Rico and appears to be represented by sole director Pavel Pogodin, according to the corporation registry, CoinDesk reported. Pogodin said he lost money from XRP when he bought it due to what he said was Ripple’s disingenuous implication that XRP would end up being worth more.
BMA also made headlines when it filed a lawsuit against FTX for allegedly manipulating the price of bitcoin, although that lawsuit was thrown out in December 2019.
Ripple has faced allegations of selling XRP as unregistered securities before, with other investors also accusing it of breaking securities laws in California.
Ripple tried to put a stop to any new cases last December, saying one of the suits had come too long after the sale had been completed. That ended up being thrown out, with a California judge deciding to allow the suit to proceed anyway.