According to a Jan. 6 story from Bloomberg, Tetragon, one of the lead partners in a $200 million Series C funding round for Ripple in 2019, has filed a complaint with the Delaware Chancery Court against the firm.
The firm is demanding that the court bar Ripple from utilizing “any cash or other liquid assets.”
Ripple addressed the charges, arguing that the complaint has “no merit” and accusing Tetragon of taking advantage of the “lack of regulatory clarity” in the United States in bringing the litigation.
Ripple’s SEC Investigation Leads to more Suits
The new lawsuit was triggered by the SEC’s own compliance action against the company. The regulator claimed that XRP was an unregistered security and that the sales of it by Ripple were unconstitutional.
If, as the regulator claims, XRP is a security, and the business has illegally sold it, it may mean the end for one of the crypto industry’s big players. The argument against Ripple by the SEC provides the organization and its token with basic questions.
After the SEC declared legal action against Ripple in December, which lost a huge chunk of the value of its XRP token, several major exchanges halted all XRP trading; earlier today, it fell from the fourth-largest cryptocurrency by market capitalization to the sixth. It was the eighth one in December.
Effects on the XRP Price
Amid investigations from both the United States The Securities and Exchange Commission, or SEC, and now Tetragon, XRP, has lost its position as the fourth-largest cryptocurrency by market capitalization.
According to CoinMarketCap estimates, XRP’s $10.3 billion market cap is behind Litecoin’s $10.5, with LTC having increased by 26 percent over the last seven days, while XRP’s market cap has stagnated. Litecoin first “flipped” the XRP on Sunday, but it was a short-lived move.
In December, the SEC charged Ripple CEO Brad Garlinghouse and co-founder Chris Larsen with running a “unregistered, ongoing digital asset securities offering” for their XRP transactions. The case is scheduled to be a mock pre-trial conference in February.
Crypto exchanges, including Coinbase, Bittrex, OKCoin, Bitstamp, OSL, Beaxy, and CrossTower, have distanced themselves from XRP following the news. Some also suggested that XRP trade must be halted, whilst others would delist the coin altogether.
Ripple in a Nutshell
Ripple is a privately-owned fintech firm with a global payment solution utilizing a patented payment network called Ripple Network (also known as RippleNet).
RippleNet, called XRP Ledger, is a payment network created on top of the consensus ledger by Ripple (also known as XRPL). Ripple sponsored the open-source production of the XRP Ledger.
Unlike other cryptocurrencies out there that cater to peer-to-peer needs, Ripple was created to connect banks, payment firms and digital asset exchanges, facilitating real-time settlement expeditions and lower transaction costs.
In 2004, Ripple was first developed by Ryan Fugger, who produced the first version of Ripple, called RipplePay. In 2013, Fugger gave it to Jed McCaleb and Chris Larsen. Chris is Ripple’s Executive Chairman at the moment.
Previously, the founder of the first Bitcoin exchange, Mt. Gox, was Jed McCaleb. He had a fallout with the Ripple squad and forked the codebase of the Ripple to start Stellar. Brad Garlinghouse is now the CEO of Ripple.