R3 Sues Ripple, Charges It Reneged On XRP Token Purchase – Ripple Counter-Suesbr>
New York-based blockchain startup R3 Holdco LLC has filed suit against Ripple Labs Inc. in the Delaware Chancery Court. The complaint charges Ripple with reneging on a deal to sell R3 up to five billion XRP tokens within the next two years at a lower-than-current market price.
R3 is a large consortium of banks and financial institutions, and has a large warchest from such supporters as Bank of America, SBI Holdings, Intel and HSBC Holdings. Ripple is the fourth-largest cryptocurrency by market cap at $8.1 billion. It is backed Standard Chartered Plc , Accenture Plc, and SBI Holdings.
R3 claims it contracted with Ripple and agreed that it had the right to purchase up to five billion XRPs at a price of $0.0085 per unit at any point until September, 2019. Ripple XRP is at $0.211578 today and has risen significantly this year, making the contracted terms worth roughly a billion dollars.
The suit claims in June, Ripple chief executive Brad Garlinghouse allegedly attempted to terminate the options contract via an email to R3 chief executive David Rutter. The suit contends that the contract does not allow for a unilateral termination of the deal, and requested a ruling that all its rights be retained, including purchasing XRP at the stated price.
UPDATE: Ripple has issued the following statement on the lawsuit:
“Our filing is straightforward – R3 misrepresented their ability and intent to deliver on their commitments. Given XRP’s ~4000% increase over the course of the year, R3 suddenly wants to tap into the value of XRP, though the facts are clear that they did not earn any option based on our agreement. We wish them well as they continue to try and build their consulting practice. In the meantime, Ripple is focused on serving our ecosystem of nearly 100 customers and signing up more.”
Ripple filed a countersuit in California Superior Court in San Francisco today. That suit alleges R3 “disappeared as a partner” after signing the agreement, focusing on fundraising. It also suffered the loss of some members of its consortium, moves which “reduced its status in the banking world,” according to Ripple’s court documents.