Recently, SEC filed a lawsuit against Ripple for its unregistered token sale. According to SEC, Ripple and R3 entered into a private settlement in 2018. Therefore, some significant features of that surfaced in the recent lawsuit. The companies were involved in a case about two years ago over an arrangement powering R3 to purchase XRP.
According to Ledger Insights, legal papers advocated that ‘an enterprise software firm’ devoted its rights to buy 1.04 billion XRP in 2019. However, the lawsuit failed to designate the name of R3. Moreover, details such as the Manhattan-based company simply represent it to be the one. However, the amount included in the settlement remains undisclosed. However, a rough estimation can be carried out with the market price of XRP tokens through that period.
The ongoing conflict of Ripple and R3 with respect to XRP
Per Ledger Insights, the XRP price during the option expiry ranged from the year beginning to September 2019 between $0.24 and $0.47. This indicates that the exercising of 1.04 billion XRP represents a settlement figure of approximately $240 million to $470 million, depending on the settlement’s execution.
The conflict between the two blockchain giants commenced as R3 blamed Ripple Labs for declining to pay 5 billion XRP tokens owed under the partnership agreement. Ripple later cited R3 as entering into the collaboration under false claims. The companies fought in various U.S. courts and sought settlement after the victory of R3 in a Californian court.
However, the U.S. SEC lawsuit against the Ripple blockchain company has dropped XRP’s price. The SEC case alleges that XRP is security instead of a currency. Hence, the cryptocurrency company should have applied for prior permission from the U.S. securities regulator to commence it. The agency further explains that Ripple blockchain company and two of its officials raised more than $1.3 billion by leading unregistered digital asset securities offerings. The lawsuit struggle has led to a drop in the XRP price by 50% surging from $0.56 on December 21 to approximately $0.28 on December 24. On December 25, the cryptocurrency transacted at $0.33, slightly above its recent depths.
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