Crypto lender Nexo has been booked for the unlawful suspension of XRP payments, with a class-action lawsuit in late December. This has led to $5 million in damages. As per the document filed in the District Court Northern District of California, a class action has been filed against Nexo Financial LLC and 3 of its subsidiaries. Following the U.S. SEC (Securities and Exchange Commission) accused blockchain company Ripple, Nexo hastened to suspend the capability to return loans with the associated XRP cryptocurrency or employing it as collateral. It didn’t offer its users notice of the termination.
Various consumers were locked out of managing their LTV (loan-to-value ratios as they couldn’t sell their tokens, which led to a string of liquidations. Plaintiff Junhan Jeong registered the suit in the Northern District of California based on other likewise situated users earlier this month. Jeong alleges that he lost $269,300 worth of XRP tokens that were posted as collateral. The suit elucidates that Nexo was not authorized to liquidate the collateral of consumers. The plaintiff counters the company’s common statement issued on December 30, which indicated that it possessed the XRP tokens owned as collateral.
Intricate details about the Rights of Affected Users
Jeon urges the court to award him and other victimized users damages in an amount that will be decided at trial. Apart from this, the plaintiff could be provided with any other relief that is considered appropriate. Also, the plaintiffs ask that Nexo cease from involving similar conduct in the future and a court order blocking the platform from modifying the terms of its Nexo Crypto Credit product without its client’s knowledge. Moreover, individuals have the right to receive the value of digital assets taken from their savings wallets. They are also entitled to cash or value digital assets they transferred to their Credit Line Wallets.
The U.S. SEC accused Ripple of raising $1.3 billion by selling XRP in unregistered securities offerings. Moreover, on March 31, a New York judge allowed Ripple’s motion to provisionally seal four documents and dictated Ripple and the SEC to agree on redactions by April 2. Ripple’s lawyers succeeded in convincing the judge to give redactions in two email exchanges. The first redaction is an email from Ripple CEO Brad Garlinghouse and an unidentified person about Rippleworks, its non-profit VC arm. The second is within anonymous parties considering the public opinion of XRP and Ripple’s control of it.