Ripple Labs Inc, a San Francisco-based blockchain developer famous for the XRP token, lost a home-court battle with rival R3 Holdco over ownership of its cryptocurrency, XRP. With San Francisco’s state appeals court denying Ripple’s request, it means that a New York court should decide the fate of the dispute against the NY-based R3.
Ripple Loses Battle Over XRP Ownership on Home Turf
Once together in partnership, it all fell down with Ripple accusing R3 of misleading representation. In turn, R3 claims that Ripple illegally declined to hand over 5 billion of its cryptocurrency XRP as originally agreed. 5 billion XRP is currently worth approximately $3.75 billion.
In September 2017, the R3 consortium filed a lawsuit in Delaware and New York against Ripple. The option contract dividing the two companies represents nearly 10% of the approximately 55 billion XRP (out of a total supply of 100 billion) currently controlled by Ripple. It would allow R3 to buy up to 5 billion XRP at a price of $0.0085 each before the end of 2019. The Delaware suit was thrown out in October.
Ripple’s counterclaim presented before court in California says:
“Rather, R3 had misrepresented its resources and current ability to perform solely to induce Ripple into executing the Agreements. For example, although R3 represented to Ripple that it would have access to its large consortium of leading banks, R3 knew and had reason to know that several key banks that would be instrumental to Ripple’s success would soon be departing from its consortium.”
Additionally, Ripple’s claim includes an email from David Rutter, Chief Executive Officer of R3, to Ripple’s CEO Brad Garlinghouse, that was used as evidence to allege R3 was not invested in the partnership:
“Brad I really like you guys and I have been clear about that. Love to see you win the payments space and even better I would love to be involved in that journey. BUT I am personally being crushed by a ridiculously complicated funding round.”
Ripple has previously said it will face “irreparable injury” if it has to battle R3 on its home turf in New York. Now, a court dispute in the “Big Apple” is the most probable outcome according to Bloomberg. Ripple’s (XRP) is down by -4.19% to $0.75 at the time of writing. It is still unclear what all of this means to the future of Ripple, the company, and Ripple, the token.