Payments startup Ripple is facing a fresh lawsuit from a multi-billion-dollar asset manager.
Tetragon Financial Group Ltd. has filed a complaint against the San Francisco-based firm with the Delaware Chancery Court seeking to “enforce its contractual right to require Ripple to redeem” Series C preferred stock that the investment company holds.
Tetragon also wants the court to freeze Ripple’s cash or liquid assets until the startup pays up, reports Bloomberg.
Ripple has since responded to Tetragon’s suit in a press release calling the company’s lawsuit baseless.
“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.”
In December, the U.S. Securities and Exchange Commission (SEC) officially filed its lawsuit against Ripple, alleging that XRP was an unregistered security upon launch and remains a security today.
Tetragon’s legal complaint against Ripple comes as the world’s largest digital asset manager, Grayscale Investment, reveals that it is the latest company to swift away from the crypto asset. The firm says it has removed XRP from its Digital Large Cap Fund.
“The Fund has removed XRP and used cash proceeds to purchase the remaining Fund Components: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash…
Prior to the sale of XRP on January 4, 2021, XRP was approximately 1.46% of the Fund. As of the end of the day on January 4, 2021, the Fund Components were a basket of 81.63% Bitcoin (BTC), 15.86% Ethereum (ETH), 1.08% Bitcoin Cash (BCH), and 1.43% Litecoin (LTC).”