The Delaware court has rejected Tetragon’s request to reclaim its equity in blockchain payments firm Ripple Labs. The Delaware Chancery Court court dismissed Tetragon’s proposal to redeem Ripple’s stock due to its continuing battle with the U.S. SEC. However, the court rejected the case, for the SEC has not still officially announced XRP’s legal status. In Jan. 2021, Tetragon Financial Group Ltd. registered a lawsuit against the firm.
Tetragon demanded reimbursement from Ripple for the $200M Series C investment round it led for the blockchain startup, via which it funded $175 million in the blockchain startup. Moreover, in enhancement to demanding an equity redemption, Tetragon also demanded that Ripple’s assets and liquidity be frozen until the payment is received. The lawsuit occurs as Ripple has been actively defending the Securities and Exchange Commission’s lawsuit over XRP being unregulated security. Tetragon contested that the SEC’s enforcement action upon Ripple over XRP sales established an official securities violation, and hence Ripple should repay the funds.
Tetragon to benefit from the Ripple v/s SEC Lawsuit
However, the Delaware court has rejected the Tetragon’s request under the notion that XRP’s status is unclear. Ripple will, therefore, not have to redeem the $175 million stock investment. Rippe issued a statement in which the company declared the Tetragon lawsuit was an “opportunistic movement to benefit the SEC allegations.” The statement continued that the newest ruling should terminate the confusion that the SEC has not decided that XRP is a security.
Last Wednesday, Ripple’s CEO Brad Garlinghouse proffered two arguments to the court for the SEC to drop its complaint upon his company. First, XRP doesn’t display any of an investment contract’s ancestral characteristics, his legal counsel claimed. Second, Garlinghouse sale of his personal XRP holdings doesn’t amount to supporting and promoting Ripple’s XRP sales. The SEC is yet to reply. Meanwhile, Ripple has won the legal battle against its investor; the SEC v/s Ripple battle is faraway from over. However, as the SEC lawsuit progresses, there are chances that the investor’s battle may resurface.
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