Business

Erik Gibbs

Ripple Labs, R3 settle dispute over XRP litigation

Ripple Labs and the R3 consortium have been involved in a lawsuit since 2017 over a series of allegedly broken promises. R3 has asserted that Ripple reneged on a previous purchase agreement, denying it the contractually guaranteed opportunity to purchase a significant amount of Ripple’s XRP tokens. According to a press release issued by Ripple, the two have agreed to a settlement of “all outstanding litigation,” the terms of which have not been disclosed.

In September 2017, R3 filed its lawsuit against Ripple. According to the consortium, it had a contractual agreement with Ripple that would allow it to purchase as many as 5 billion XRP tokens for a set price of $0.0085 each until the end of 2019. Ripple allegedly refused to honor the agreement, forcing R3 to file its lawsuit.

The suit was taken to courts in Delaware and New York, but a month later was thrown out by a judge in Delaware. That forced the case to be heard in New York and California.

Ripple then filed a counter-suit against R3 in California, accusing the group of not fulfilling a number of obligations that had been outlined in the contract. When the case went to trial, the value of the disputed amount was $1 million, but this jumped to $3.85 billion a few months later on the increase in XRP’s value.

Ripple has faced several lawsuits in the past year. In May, it was sued by an investor who claimed that XRP was a security although Ripple didn’t disclose it as such. That investor, Ryan Coffey claimed that XRP, as a security, was violating U.S. securities laws. Coffey’s investment in Ripple was a direct result of the meteoric increase in value of BTC in late 2017, which he had expected to see with XRP. Coffey lost around $550, instead of seeing the huge returns, and the case was subsequently tossed.

Another investor, David Oconer, also tried to sue Ripple for the same reason. In July, he argued that XRP has “all the traditional hallmarks of a security” and sued for breach of securities laws. His suit has yet to be decided.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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