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The UK-based investment giant has stated that it plans to redeem its Series C stock as per the “contractual right”. Thus, it asks regulators to prevent Ripple from using its cash or other liquid assets until it clears the dues. Ripple says the lawsuit by Tetragon holds no merit.
Soon after the US Securities and Exchange Commission (SEC) filed a lawsuit on Ripple two weeks back, the troubles for the company have just escalated further. On Tuesday, January 6, UK-based investment giant and multi-billion asset fund manager Tetragon Financial Group, has sued the blockchain startup after the SEC lawsuit that claims that Ripple sold XRP as unregistered securities.
The Tetragon Financial Group filed the complaint earlier on Monday at the Delaware Chancery Court, reports Bloomberg. In the filings, the investment firm seeks to “enforce its contractual right to require Ripple to redeem” Series C preferred stock held by Tetragon. Besides, it also seeks to block Ripple from using its cash and other liquid assets until the payment passes through.
As Bloomberg reports, the UK-based financial group has asked for a “temporary restraining order, a preliminary injunction and an expedited trial” against Ripple. Note that the Tetragon Financial Group was leading the $200 million Series C funding round for Ripple in 2019.
Well, it looks like Ripple partners have started distancing themselves from the blockchain startup. Previously, remittance company MoneyGram noted that it hasn’t used Ripple services anytime in the past. Now, this latest news coming from a big investment firm will further dent Ripple’s image in the market.
Ripple Said Tetragon Lawsuit Holds No Merit
Following the lawsuit filing, Ripple issued a statement citing the terms of the deal. A provision in the deal notes “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.”
The blockchain startup further stated:
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.
Over the last month, several crypto exchanges have announced the trading suspension and even delisting XRP from their platform following the SEC charges. In the meantime, the XRP price and its valuations have eroded significantly losing nearly $20 billion in two weeks. Ripple will be confronting the SEC for the first time in February 2021.