The negative effects of SEC's lawsuit against Ripple in recent months continue. Ripple recently claimed that the case filed by the SEC caused more than $ 15 billion in damage to XRP holders. XRP investors, who are in a difficult situation due to the SEC case, seem to be taking action with the latest developments. After causing millions of dollars in losses by suspending XRP payments in December, Nexo is now facing a class action lawsuit.
↘️After the SEC case, XRP investors are taking action!
As part of this lawsuit, the SEC accuses Ripple and its CEO, Brad Garlinghouse, and co-founder Chris Larsen of selling $ 1.3 billion of unrecorded securities through XRP. Also, according to the SEC, XRP has been a security since the day it was launched. At the first hearing of the case on February 22, Ripple requested the dismissal of the case.
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However, after this lawsuit was opened, the price of the crypto currency fell deeply. The cryptocurrency has suffered a decline of over 80 percent. In addition, after the SEC case, more than 33 crypto platforms and market makers suspended or completely stopped XRP transactions. Now, after these negative developments, Ripple investors are taking action. In the first phase, XRP investors filed a request to intervene in the SEC's lawsuit against Ripple. Now, investors are suing the cryptocurrency lending platform #Nexo.
↘️Nexo, which caused millions of dollars in damage, now faces a class action lawsuit
The cryptocurrency lending platform Nexo was hit in late December in a class action claim that caused $ 5 million in losses due to the "illegal" suspension of XRP payments. Plaintiff Junhan Jeong filed the case earlier this month in California's Northern Territory on behalf of other similarly located users. After the U.S. Securities and Exchange Commission sued the blockchain company Ripple, Nexo rushed to suspend its ability to use loans with the XRP cryptocurrency as repayment or collateral. The company did not notify its users of the suspension.
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Hundreds of affected customers were “locked in” maintaining their credit-to-value (LTV) rates because they couldn't sell their tokens, which triggered a series of liquidations. Thus, Nexo effectively banned these customers from maintaining LTV rates and then punished them for not maintaining LTV rates. Junhan Jeong claims that he lost $ 269,300 worth of XRP tokens sent as collateral.
↘️Nexo customers now expect the company to recover their losses
The lawsuit says Nexo does not have the "right" to liquidate customers' collateral. Plaintiff objects to the company's statement that it is the owner of the promised XRP tokens issued on December 30:
IF NEXO WERE TO TAKE OVER "OWNERSHIP" OF THE CRYPTO ASSETS THAT NEXO CUSTOMERS POST AS COLLATERAL, IT WOULD BE AN EXTREMELY UNFAIR CONSEQUENCE THAT NEXO'S CUSTOMERS WERE UNREASONABLY FAVORABLE AND THE NEXO CUSTOMER HAD NO REASONABLE CHOICE OR BARGAINING POWER OVER THE TERMS.
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Nexo customers now expect the company to recover its losses after suspending XRP payments in December, causing millions of dollars in losses. Investors want Nexo to pay compensation “in an amount to be determined at the hearing”. In addition, any other compensation deemed appropriate to the plaintiff may be awarded.