A Judge in NY Rejects Case Filed Against XRB Developers
An XRB investor was trying to sue the development team behind XRB by attempting to intiate a class-action lawsuit but had it rejected by a judge in NY, as per October 22 court documents.
The developers were accused of luring the investor to start trading in the altcoin on the BitGrail platform, which suffered a major loss of cryptocurrencies amounting to several 100's of millions of US dollars.
The suit, which was filed via law agency Silver Miller, was first registered back in April by Alex Brola, an American citizen who allegedly purchased XRB on the BitGrail platform worth a total of $50,000 on 10 December 2017.
Brola accused the main dev team behind XRB of breaching securities laws set in the United States as they are selling securities that are not registered. Furthermore, he goes on to say that they are not correctly representing the extent of reliability behind the Italian cryptocurrency exchange platform BitGrail, in which 17M XRB altcoins, worth $187M, went missing last February.
Brola requested in the suit that the company be forced into a rescue fork, in which the missing XRB amounts would be changed into a new crypto to compensate the investors in a fair manner.
Brola is the only one named in the suit as a plaintiff, but it was claimed in the documents that there are hundreds, and maybe thousands, of supposed class-action representatives, whom Silver Miller had plans to contact in the discovery stage.
Case Withdrawn by Plaintiff
It was US District Judge Nina Gershon who rejected the case, which came just one month after it was voluntarily withdrawn by the plaintiff. It was not stated why the judge decided to drop the case; however, lead defense attorney Peter Scoolidge said that Brola had withdrawn it as there was a lack of merit to the case.
Before Brola decided to withdraw his complaints, the defendants had been urging the federal court to reject the suit on the grounds that these cryptos are not considered securities at all and in effect are not liable under related laws.
The developers filed a motion for dismissal last September, stating that cryptocurrencies are not labeled as securities because the firm hadn’t acquired any profits for their security services of the tokens and that there were no investors. It was further noted that the value behind XRB is not acquired from a management team handling customers’ property, but that actually its value comes from the utility as a type of currency or the possibility of it.
After these events, XRB and BitGrail started accusing one another of being accountable for the $187M XRB loss. The Chief Executive Officer at BitGrail admitted there was no way of retrieving the missing amounts.