Ripple Labs Inc and R3 Hondco LLC filed lawsuits against each other on Friday. The suit is in relation to Ripple’s attempted termination of a 2016 options contract that grants R3 the right to purchase up to 5 billion XRP tokens at $0.0085 USD each until September 2019.
Ripple Labs and R3 Holdco LLC agreed upon the deal in September 2016, which was formalized through the issuance of an options contract to R3. The lawsuit alleges that Brad Garlinghouse, Chief Executive of Ripple, sought to terminate the options contract via an email which was sent to R3’s Chief Executive, David Rutter. R3 has sued Ripple in response to the email, arguing that the contract cannot be unilaterally terminated.
R3 is asking the court to rule that R3 is entitled to all rights outlined in the 2016 contract. With XRP tokens now trading for more than $0.20 each, the contract would entitle R3 to purchase tokens from Ripple Labs before immediately selling them for an approximate gain of over 2000%.
Ripple counter-sued R3 in San Francisco, alleging that R3 had failed to deliver on a different partnership agreed upon by both companies that would give Ripple access to R3’s consortium of financial institutions in exchange for 15% of any revenue generated by Ripple through commercial partnership with banks associated with R3. Ripple’s suit also alleges that R3 touted major institutions like Goldman Sachs and JP Morgan, who exited R3’s network shortly after the establishment of the deal Ripple has requested that court declare to be invalid, and to mandate that R3 pay damages to Ripple.
A representative of Ripple labs has stated that the company’s “filing is straightforward – R3 misrepresented their ability and intent to deliver on their commitments. Given XRP’s ~4000 percent increase over the course of the year, R3 suddenly wants to tap into the value of XRP, though the facts are clear that they did not earn any option based on our agreement.” R3 has stated that it “does not discuss the details of pending litigation. We are confident in our position and hope for a speedy resolution of this matter.”
Whose lawsuit do you think the court will recognize? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, R3, and Ripple Labs
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