Ripple faces another lawsuit after the recent SEC action against the company. Tetragon Financial Group filed a complaint against Ripple Labs in Delaware Chancery Court and asked the San Francisco-based company to redeem Tetragon’s Series C preferred stock. Cryptocurrency XRP reacted negatively to the news and dropped nearly 5% following the news. Litecoin has taken over XRP to become the fourth most valuable cryptocurrency in the world.
According to a report published by Bloomberg, Tetragon requested Court to block Ripple from using cash and other assets until the payment is made. In addition to the redeem request, the financial services group requested an expedited trial and preliminary injunction, and a restraining order against Ripple.
Ripple dismissed the basis of the lawsuit and mentioned that it has no merit. “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,” Ripple mentioned in an official reply.
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Ripple, XRP and Cryptocurrency Market
Ripple faced a lawsuit filed by the SEC last month in which the commission termed XRP as security and mentioned that the company and its two executives were conducting a $1.3 billion unregistered securities offering. XRP crashed more than 60% following the news and the overall cryptocurrency market faced a $50 billion sell-off. Several crypto exchanges halted XRP trading and some of them completely delisted the cryptocurrency. XRP is currently trading near $0.22 as the total market cap dropped from $29 billion to $10 billion within two weeks.
Litecoin became the fourth-largest cryptocurrency in the world after LTC reached a market cap of $10.7 billion, around $500 million more than XRP’s market cap.