Ripple Gets Hit From the Inside
According to Bloomberg, on Tuesday (Jan. 5, 2021), Tetragon Financial Corporation, an investment firm headquartered in the United Kingdom, lodged a lawsuit against Ripple at the Delaware Chancery Court on Monday. Part of the litigation aims to “enforce its contractual right to require Ripple to redeem” the prefered stock of Series C.
Tetragon was the largest bidder in Ripple’s $200 million Series C investment back in December 2019. The funds collected have been channelled to update the XRP Ledger and extend the use of the XRP token.
The investment firm also requires the court to suspend the liquid or cash assets of Ripple before the company completes the payment. In addition, Tetragon is demanding a restraining order along with an expedited prosecution and a temporary injunction.
Tetragon’s case was brought after the U.S. SEC reported back in December 2020 that Ripple had sold unregulated shares worth more than $1 billion. Following the claims raised by the SEC, the implications for Ripple were catastrophic.
Apart from the valuation of the XRP token taking the nosedive, separate crypto sites have already either been removed or intended to remove or suspend XRP for U.S. traders. As CryptoPotato recently announced, Grayscale Investments withdrew the token from its diversified public crypto portfolio, liquidated its XRP holdings, and used the funds to acquire other crypto assets in the fund.
The SEC’s claims have impacted big cryptocurrency exchange Coinbase, after one of its customers sued the firm for earning commissions from the illicit selling of XRP on its site.
Determined to Come Out Winning
Meanwhile, Ripple is ready to win the legal battle, saying that it will respond to the allegations of the SEC and show that they are baseless. The tentative pre-trial date for the case SEC vs. Ripple is scheduled for February 2021.
Despite the issues surrounding Ripple and XRP, it appears like the organisation has backers willing to bear their weight. A petition by a coalition of supporters of Ripple argued that the arguments of the SEC, which were “frivolous,” had negatively affected a number of ordinary Americans carrying XRP. The petition even requested the White House to declare XRP a currency.
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