The value of a legal dispute involving US-based fintech startups R3 and Ripple has ballooned to nearly $20 billion on the heels of a breakneck rally that has launched ripple’s market cap past $140 billion.
As CCN.com reported last September, R3 and Ripple filed dueling lawsuits regarding a contract dispute that arose after the dissolution of their once-promising partnership, which was first announced in 2016.
R3 sued Ripple first, claiming that the company violated the partnership agreement by terminating an options contract that gave R3 the right to purchase up to 5 billion XRP — the native currency of the Ripple Consensus Ledger (RCL) — for $0.0085 per unit.
The XRP price has soared by 45,000 percent since that deal was inked, peaking at a global average of $3.84 during intraday trading on Thursday.
In its suit, R3 asked the court to order Ripple to honor that agreement, which would allow the firm to purchase the 5 billion XRP — now worth $19.2 billion at its Jan. 4 high — for just $42.5 million, a discount of approximately 99.8 percent off the market price.
If successful, the suit will instantly provide R3 with a five percent stake what has been 2018’s hottest cryptocurrency at virtually no cost, and it will provide the firm with a tidal wave of capital at a time when it has struggled to raise funding from its consortium members.
However, disputing R3’s claim, the San Francisco-based Ripple countersued R3 in California, arguing that R3 failed to fulfill its obligations under the partnership agreement, nullifying its right to exercise the XRP options.
Both firms have seen small victories in the legal conflict. In October, a Delaware judge dismissed R3’s suit, ruling that it did not fall under the court’s jurisdiction. However, Ripple experienced a similar setback in December, when a California judge ruled that it did not have jurisdiction over Ripple’s countersuit against R3.
The legal showdown will now head to New York, giving the New York City-based R3 home-court advantage, so to speak, for the final judgment on the $19 billion options contract.
Write to Josiah Wilmoth at josiah.wilmoth(at)CCN.com.
Featured image from Shutterstock.
Last modified: July 16, 2020 11:26 AM UTC