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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
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`TYLER TOOMEY, on behalf of himself
`and all others similarly situated,
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`Plaintiff,
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`v.
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`RIPPLE LABS, INC., XRP II, LLC, and
`BRADLEY GARLINGHOUSE,
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` Defendants.
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`Civil Action No.
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`CLASS ACTION COMPLAINT, DEMAND FOR JURY TRIAL,
`INJUNCTIVE RELIEF SOUGHT
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`Plaintiff Tyler Toomey (“Plaintiff”) brings this action on behalf of himself and all others
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`similarly situated against Defendants Ripple Labs, Inc. (“Ripple”), XRP II, LLC, and Bradley
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`Garlinghouse (collectively “Defendants”). Plaintiff makes the following allegations pursuant to
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`the investigation of his counsel and based upon information and belief, except as to the
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`allegations specifically pertaining to himself, which are based on personal knowledge.
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`NATURE OF THE ACTION
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`1.
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`This is a class action lawsuit regarding Defendants’ sale of XRP cryptocurrency
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`tokens to Florida residents in violation of Florida securities laws. Specifically, Defendants sold
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`millions of dollars (or more) of XRP tokens, which are securities under Florida law, to Florida
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`investors without registering the same either with federal or Florida authorities.
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`2.
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`Recently, the United States Securities and Exchange Commission (“SEC”) filed a
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`lawsuit against Defendants and certain other individuals, Securities And Exchange Commission
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`v. Ripple Labs, Inc., et al., Case No. 1:20-cv-10832 (S.D.N.Y.), alleging that “[f]rom at least
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`2013 through the present, Defendants sold over 14.6 billion units of a digital asset security called
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`1
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`Case 3:21-cv-00093-BJD-JBT Document 1 Filed 01/25/21 Page 2 of 118 PageID 2
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`‘XRP,’ in return for cash or other consideration worth over $1.38 billion U.S. Dollars (“USD”),
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`to fund Ripple’s operations [. . .]. Defendant[] undertook this distribution without registering
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`their offers and sales of XRP with the SEC as required by the federal securities laws, and no
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`exemption from this requirement applied.”1 Defendants similarly failed to comply with Florida
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`securities laws by failing to register with the Florida Office of Financial Regulation.
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`3.
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`Under the Florida Securities and Investor Protection Act (the “Act”), “[i]t is
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`unlawful [. . .] for any person to sell or offer to sell a security within this state unless the security
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`is exempt [or] registered pursuant to this chapter.” Fla. Stat. Ann. § 517.07(1). The Act further
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`provides that “[n]o securities that are required to be registered under this chapter shall be sold or
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`offered for sale within this state unless such securities have been registered pursuant to this
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`chapter and unless prior to each sale the purchaser is furnished with a prospectus meeting the
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`requirements of rules adopted by the commission.” Fla. Stat. Ann. § 517.07(2).
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`4.
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`Ripple’s XRP tokens are securities because they qualify as “investment contracts”
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`under Florida law. Fla. Stat. Ann. § 517.021(22)(q).
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`5.
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`Defendants did not provide Florida investors with material information regarding
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`the offering of XRP, as would have been required had Defendants complied with the law.
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`6.
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`Defendants began their unregistered and unlawful sale of XRP in 2013, despite
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`having knowledge as early as 2012 that XRP could be considered an “investment contract” under
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`federal and, by extension, Florida law. Nevertheless, Defendants chose to disregard filing
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`requirements and initiated a vast offering of XRP without registration. Further, Defendants
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`made affirmative representations to the investing public that XRP is not a security, when in fact
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`it is.
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`1 The SEC’s Complaint is attached hereto as Exhibit A.
`2
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