A lawyer for Tetragon Financial has accused Ripple Labs of “word games” in a court hearing for a dispute involving a $175 million stock buyback.
A Game of Words
A UK-based investment management company called Tetragon Financial Group is accusing Ripple Labs of playing “word games” as the company sues the blockchain-based payments settlement provider for $175 million.
Lawyers for Tetragon are asking the Delaware Chancery Court to force Ripple Labs to suspend all transactions until the company buys back $175 million worth of shares it issued to Tetragon.
The allegation centers around a shareholders’ agreement entered into by Tetragon and Ripple Labs in 2019. The agreement sets out terms that trigger an obligation by Ripple Labs, to buy back Tetragon’s stock in the company.
According to Michael Shuster, one of the lawyers on the Tetragon legal team, Ripple Labs:
“looks at [the agreement’s] language and sees things that aren’t there.”
Moreover, Shuster goes on to accuse Ripple Labs of intentionally misconstruing the agreement in an attempt to avoid its obligations. Indeed, the current dispute follows a filing in Jan 2021, in which Tetragon attempted to stop Ripple Labs from purchasing any more XRP until it had redeemed the company’s stock.
Ripple’s Legal Woes
The dispute comes as Ripple Labs is due to face the United States Securities and Exchange Commission (SEC) in court. The hearing, which will take place on Feb. 22, is part of the action taken by the SEC in 2020, after it alleged the company and its executives took part in the illegal sale of securities.
However, upon the SEC’s filing towards the end of 2020, many cryptocurrency exchanges decided to de-list the token pending the result of the case for fear of engaging in criminality themselves.
This caused a sell-off in the markets, causing the token’s price to lose 60% in value. Furthermore, many funds and large XRP holders, such as Grayscale, promptly decided to divest themselves of Ripple’s legal troubles.
In fact, Tetragon’s argument in the current hearing is similar to the SEC’s filing involving buybacks, according to the agreement.
The Market Rages On
Despite these concerns and cases, XRP’s value has significantly recovered as the market prices in the token’s sketchy legal outlook. XRP currently trades at $0.539, close to the price it held before the SEC’s filing.
The wider market’s strong performance might have played a role in its recovery. Bitcoin (BTC) cruised past both the $40,000 and $50,000 mark, setting an all-time high of $52,547.80 on Feb 17. It currently trades around $52,000.
Moreover, the total cryptocurrency market cap is now solidly above $1.5 trillion, sitting at an all-time high of $1.62 trillion.
Whilst the increased levels of optimism and euphoria might have distracted XRP holders and new-investors from its legal battles, the SEC and other parties still look determined to fight the near-decade old company.
Only time will tell which party comes out on top.
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