Ripple, the 3rd largest crypto exchange company, based in Francisco, may need to prepare for more lawsuits as a major UK-based investor in Ripple’s Series C funding has slammed a new case on the Francisco-based crypto company.
A January 5 Bloomberg news report revealed that Tetragon Financial Group, which manages assets of over $2 billion, has approached the Delaware Chancery Court demanding the enforcement of its rights to compel Ripple to redeem its Series C preferred stock and restrain the company from spending its cash until the plaintiff’s rights are enforced.
Tetragon held the largest shares in Ripple’s latest funding
Tetragon had the largest share in Ripple’s December 2019 Series C funding of $200 million. The funds were reportedly raised to upgrade the XRP Ledger and widen the utility of its token. In a sealed brief, the UK-based company also prayed the court to freeze Ripple’s assets to ensure the company pays. The plaintiff is praying the court for an accelerated trial and a restraining order.
Meanwhile, Ripple released a statement dismissing the Tetragon case as a “no merit” one, as no court has convicted XRP as an unregistered security, despite SEC allegations. However, Ripple has accused Tetragon of exploiting the absence of clear regulatory procedures in the US to accuse it wrongly. Ripples, however, admitted that Tetragon has the right to reclaim its equity. Tetragon’s spokesperson has not yet responded to Ripple’s statement.
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The fresh case arose less than a month after the U.S. Securities and Exchange Commission (SEC) indicted Ripple for conducting shady security offerings to the tune of $1 billion. The allegations dealt a devastating blow to Ripple, and its effects seem not to be over yet.
In addition to the XRP price crashing, various crypto platforms have removed or threatened to remove the token, a move that will affect US traders. Grayscale Investments is one of the exchange platforms that have delisted the XRP token from its public fund and bought other crypto assets to replace its holdings in XRP.
Meanwhile, Coinbase was also a major crypto exchange that has also felt the SEC’s indictment’s effects. This followed a lawsuit where a Coinbase user alleged that the company received some ill-gotten commissions from the fraudulent sales of XRP on the user’s platform.
Ripple and Supporters remain undaunted
Meanwhile, Ripple seems to have resolved to confront the legal battles it faces from the powerful entities, including the SEC and its major investor. The company stated that it would respond to the SEC’s allegations, which it described as false and unproven. The preliminary pretrial case will be heard in February.
However, Ripples and its supporters are not going to surrender easily to the attacks. In a counter move, a group of Ripple backers has filed a petition against the SEC accusing the regulatory agency of waging a needless war on Ripple by piling up frivolous allegations against the crypto company. Last Week, Coinbase Inc., the biggest US crypto exchange, threatened to stop XRP sales to the public after the SEC lawsuit against Ripple, accusing it of misleading investors.