According to the new counterclaim filed by the representatives of Ripple, Ripple R3 Court fight is taking a new turn. How will the situation unfold? Who is to blame in this case?
10 January, AtoZForex – Back in summer of 2016, the ex-CEO of Ripple, Chris Larsen, has inked a deal with a bank consortium R3. The deal included an option for Ripple’s partner to purchase 5 billion coins for a cheap price – less than a penny.
Ripple R3 Court Fight Takes a New Turn
This executive decision has backlashed, as back in July, R3 has sued Ripple, accusing the company that it had reneged on an agreement where R3 could buy 5 billion XRPs at a price $0.0085 per unit until 2019.
Ripple then has countersued the blockchain related firm, stating it had annulled the agreement after R3 failed to fulfill several promises. Ripple representatives have also stated that R3 has sought to exercise the options as an opportunity after the price of the coin has significantly risen.
Today, the option contract is worth at least $12 billion and the two sides are claiming their rightness. In the latest developments in regards to Ripple R3 case, Ripple has filed a counterclaim in New York. The document accuses R3 of inking the deal in bad faith. Ripple also states that R3 has used the partnership to steal its expertise to develop a competing product.
The new twist also includes emails from the CEO of R3, David Rutter. In fact, the filing emerges at a time of heightened interest in Ripple’s native token, XRP. In the recent weeks, the cryptocurrency has managed to break above $3.70. As of now, the price of one XRP coin stands at $1.91.
Why Ripple terminated R3 agreement?
The R3 Ripple option contract holds almost 10% of the approximately 55 billion XRP that is controlled by Ripple. The latest counterclaim against R3 includes Ripple’s statement that the company has the right not to honor the options contract. The Ripple argues that its partner failed to uphold its end of the deal – specifically, failing to “assist Ripple sign up a single bank.”
The counterclaim also says that the contract is invalid due to the fact that CEO David Rutter failed to inform that some of the US banking giants were pulling out of R3. The statement reads:
“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.”
Who to blame?
The argument from Ripple does not specify the number of damages. It also accused R3 of “unclean hands”, citing the alleged email from Rutter to the Ripple’s current CEO, Brad Garlinghouse:
“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”
In the R3’s complaint, the company claims that Ripple’s decision to annul the option was unjustified. The R3 says that the real motive of Ripple was because the option was unexpectedly “in the money.”
The result of the New York court clash is hard to foresee. According to a contract law expert, the things are most likely to turn on whether R3 failure to inform Ripple about the US banks departure amounts to a “material breach.”
Meanwhile, the Ripple R3 Court Fight comes as one of the obstacles in the Blockchain adoption by the global banking system.
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