Following the launch of a class action lawsuit against Ripple on May 4, shareholder rights law firm Johson Fistel, LLP is reportedly “investigating potential claims against Ripple Labs.”

“Defendants have since earned massive profits by quietly selling off this XRP to the general public…in order to increase demand for XRP, and thereby increase the profits it can derive by selling XRP,” reads the suit.

“Ripple Labs has consistently portrayed XRP as a good investment, relayed optimistic price predictions, and conflated Ripple Labs’ enterprise customers with usage of XRP.” Interested investors are encouraged to contact Johnson Fistel.

“A Never-Ending ICO”

The original class action lawsuit was brought against Ripple (XRP) by a burned investor, Ryan Coffey. Together with blockchain-specialized law firm Taylor-Copeland Law, Coffey has accused the San Francisco-based Ripple Labs of violating both state and federal securities laws.

The suit alleged that Ripple has been carrying out what a “never-ending ICO”, selling tokens that can be legally classified as unregistered securities under the California Corporations Code and the US Securities Act. The case has been brought on behalf of all entities who purchased XRP after January 1, 2013.

Here are some of the allegations in the complaint against Ripple. Mentions a blurring of the lines between Ripple’s Enterprise offerings and $XRP in an effort to pump the $XRP price.

— Kyle Torpey (@kyletorpey) May 4, 2018

Coffey reportedly bought 650 XRP tokens for roughly $2.60 each (worth ~$1690) on January 6, 2018. Twelve days later, on January 18, he traded all of his XRP for the equivalent of $1,105 in Tether dollars, marking a net loss of approximately $550.

In Spite of the Hype, Ripple Still Claims That It Is “Not a Security”

There may be some merit to the case–CCN reported that formed CFTC Commission Chairman Gary Gensler said that he would classify XRP tokens as ‘non-compliant securities’ due to Ripple’s centralized distributed model.

However, murky interpretations of the ways that financial regulations should apply to cryptocurrencies have led to some serious legal confusion within the crypto space.

What a nightmare this is. SEC says “all ICOs” its seen are sales of securities, but FinCEN says they are “generally” money transmission.

But by law, they can’t be both.

As an industry, we must do a better job of educating our governments. … @coincenter

— Marco Santori (@msantoriESQ) March 6, 2018

Despite the buzz around the lawsuit, Ripple executives remain unconcerned. They have always publicly held the opinion that XRP is “absolutely not a security,” in the words of Cory Johnson, Ripple’s chief market strategist.