By
Chimamanda U. Martha
April 18th, 2024
After engaging in almost one-year of legal battle, the two companies decided to end it in an undisclosed agreement.
Blockchain firms Ripple and R3 have decided to put an end to an ongoing legal dispute over the XRP purchase option. In an official disclosure, Ripple Labs Inc. released a statement saying:
“R3 HoldCo LLC, R3 LLC, Ripple Labs Inc. and XRP II, LLC announce that they have reached a settlement of all outstanding litigation between the parties. The terms of the agreement will remain confidential and both sides look forward to putting these disputes behind them.”
The two companies were engaged for almost one-year of a legal battle. The dispute started over the terms of a partnership agreement between the two companies that caused them to break earlier ties. Last year in September 2017, R3 sued Ripple alleging that the latter violated a stipulation in the partnership agreement. As part of the agreement, R3 had the right to buy up to 5 billion XRP tokens at the rate of $0.0085 per token until the end of 2019.
The existing price of Ripple (XRP) tokens is $0.26, a 3000% increase from R3’s quoted price. As per the agreement, R3 can purchase all the 5 billion XRP tokens – now valued over $1.3 billion – at just $42.5million. When the Ripple price reached its all-time high of $3.84 in January, the value of R3’s XRP tokens was at $19 billion.
However, the enterprise blockchain startup R3 has said that Ripple has refused to stay by its word. Thus R3 filed a complaint in the courts of Delaware and New York, requesting to force Ripple into compliance. Ripple later filed a countersuit in California saying the R3 has failed to fulfill its obligations under the agreement and thus exhausted its right to carry out XRP options.
Ripple Faces Multiple Other Lawsuits
There are multiple other lawsuits filed on Ripple Labs, alleging that the company must declare XRP tokens as securities. Investors have alleged that the company has a high level of centralization by holding 55 billion XRP tokens in its escrow account. Some experts also allege the Ripple inflates the price of XRP artificially to fund its startup.
The blockchain startup has issued clarification alleging that its brand is different from XRP. Ripple Labs CEO Brad Garlinghouse insists that the digital coin is not a security. Garlinghouse sites a few reasons showing how XRP and Ripple are different:
- “If Ripple as a company shut down tomorrow, the XRP ledger would continue to operate.”
- “If you buy XRP, you’re not buying shares of Ripple.” Similarly, “Saudi Arabia owns a lot of oil, but they do not have control of oil.”
- “XRP is solving a problem. There’s no security in a utility.”