Tetragon capital, the lead investor in Ripple’s $200 million Series C round, has sued Ripple Labs. Tetragon Financial Group Ltd. filed the complaint on January 4th in Delaware Chancery Court and is looking to enforce its contractual right that requires Ripple to redeem the Series C preferred stock owned by Tetragon. Tetragon is also looking to block Ripple from using any cash or other liquid assets until the payment is made.
In addition, Tetragon has asked the court for a temporary restraining order, a preliminary injunction, and an expedited trial.
According to the team at Ripple Labs,
In Ripple’s Series C investment agreement, there is a provision that if XRP is deemed to be a security on a go forward basis, then Tetragon has the option of having Ripple redeem their Ripple equity. Since there has been no such determination, this lawsuit has no merit. We are disappointed that Tetragon is seeking to unfairly take advantage of the lack of regulatory clarity here in the U.S. The courts will provide this clarity and we are very confident in our position.
The lawsuits are piling up
This is the first major lawsuit against Ripple since the SEC sued Ripple Labs Inc. for conducting a $1.3 billion unregistered securities offering. Considering that the SEC had eight years to build a case against Ripple, Ripple’s chances of getting out unscathed are looking extremely slim–unless, the company settles with the SEC.
The SEC vs. RIPPLE LABS, INC., BRADLEY GARLINGHOUSE, and CHRISTIAN A. LARSEN lawsuit has even created trouble for several companies that supported XRP trading pairs. Since the news broke regarding the SEC lawsuit, several digital currency exchanges and OTC desks have made announcements saying that they would no longer support XRP trading pairs. However, it may be too late for some of those exchanges.
There is a class-action lawsuit against Coinbase that claims that Coinbase violated California’s unfair competition laws when they profited from the sale of XRP even though they knew that XRP was an unregistered security. And according to Dr. Craig S. Wright, he has proof that supports the claims the plaintiffs are making in the class-action lawsuit.
What’s next for Ripple
The Southern District Court of New York has scheduled Ripple’s initial pretrial conference for 10 am on February 22nd. That event will give the world the first look into Ripple’s uphill battle against the SEC.
This story was updated at 4:33 pm EST to include a statement from Ripple
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