Ripple: Tetragon’s Lawsuit Has No Merit; Can Redeem Equity ‘If XRP Deemed a Security’
Meanwhile, the Ripple partner wants to enforce its contractual right and has asked the court for a temporary restraining order, a preliminary injunction, and an expedited trial.
Ripple investor Tetragon Financial Group Ltd. has sued the company after the US Securities and Exchange Commission claimed that the digital currency XRP was sold improperly.
The UK-based investment company with total assets of $2.32 billion has filed a complaint in Delaware Chancery Court.
The investment company said it seeks to “enforce its contractual right to require Ripple to redeem” Series C stocks held by Tetragon. As per the filing, the company also wants to block Ripple from using any of its cash and other liquid assets until they are paid.
Tetragon has also asked the court for a temporary restraining order, a preliminary injunction, and an expedited trial.
Meanwhile, Ripple said that the lawsuit has “no merit” because XRP hasn’t been declared an unregistered security yet, as the SEC claims.
“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,” reads Ripple’s statement on its website.
It further goes on to say that under the provision of the Series C investment agreement, Tetragon has the option to redeem its Ripple equity “if XRP is deemed to be a security on a go-forward basis.”
To Be Seen
Cryptocurrency exchange Coinbase Inc. has also been sued in a class-action lawsuit by an XRP investor seeking to recover commissioners paid by XRP trades, alleging that the company knew that the digital asset qualified as securities. Last week, Coinbase announced that it would stop selling XRP to its US users much like many other crypto service providers such as Grayscale which has removed XRP from its Digital Large Cap Fund on Monday.
This lawsuit in San Francisco federal court came just about two weeks after Coinbase filed for an initial public offering (IPO) which is expected to be a watershed moment for the crypto industry in getting mainstream recognition.
According to Sonny Singh, Chief Commercial Officer at BitPay, a Ripple partner, Coinbase’s IPO is “very very instrumental” for the market.
“It's going to put a lot of media frenzy around this whole industry,” he said, noting that Coinbase’s revenue numbers are “going to blow people's minds away,” and Wall Street will drive that stock price up.
Singh also commented on Ripple’s situation, “it's definitely going to be a headache for Ripple a little bit,” he said adding, it’s to be seen if the SEC wants to do a long drawn out court case or a quick settlement, especially after the administration changes under the new Presidency.