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U.S. District Judge Beth Labson Freeman recently dismissed a class action lawsuit by XRP holders against crypto lending platform Nexo Capital. Despite dismissing the lawsuit, Judge Freeman ruled that Nexo must face other lawsuits for unlawful termination of XRP support without properly informing users.
According to a recent report by the Legal News Service Law360 Judge Freeman has so far dismissed the lawsuit because plaintiff Joonhan Chung was unable to waive the class action, which is contained in the Nexo terms and should not apply.
Judge Freeman said in the ruling that Chung did not properly show that Nexo’s provision was ambiguous to understand.
The plaintiff got another chance to change his claims
However, the judge allowed the plaintiff to amend his claims.
Commenting on the event, Attorney Ted Normand of Roche Freedman LLP, Chong’s legal representative, said:
“We are pleased that the court has agreed with us on the merits, and we look forward to showing that the case should be treated as a class action.”
A California district judge has refused to dismiss Chung’s lawsuit in its entirety under California’s unfair competition law, According to Law360.
Details of the trial
Notably, Chung filed a lawsuit against Nexo in April 2021. The plaintiff alleged that the suspension of XRP by the cryptocurrency lending platform caused $5 million in damage to its customers.
The plaintiff argued that Nexo’s termination of support for XRP without prior notice was a breach of his contract. He added that the crypto lending platform also went so far as to sell Ripple coins, which Nexo customers used as collateral, and kept the profits for itself.
While supporting Chung’s claim of breach of contract, Judge Freeman said Monday that Chung added charges to his latest complaint indicating that Nexo acted in bad faith regarding the suspension, including offering to sell him plaintiff’s bail after he allegedly suspended due to regulatory uncertainty over XRP.
Ripple Effect vs SEC Lawsuit
It is worth noting that the case is part of allegations brought against Ripple by the Securities and Exchange Commission (SEC). Recall that the SEC accused Ripple in December 2020 of offering unregistered securities in the United States through an initial coin offering (ICO) in 2013.
Following the allegations, Nexo immediately stopped supporting XRP, disregarding users who may have provided cryptocurrency as collateral.
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