According to reports, the Delaware Chancery Court has approved a temporary restraining order against Ripple Labs Inc. on behalf of an investor, which seeks to stop any further XRP purchases until the investor can sell back its stock. The court approved the bid from investor Tetragon to prevent Ripple from buying any more XRP or redeeming other investor stock until Tetragon’s stake had been redeemed. Tetragon has said the action was brought following an investigation into Ripple by the U.S. SEC.
SEC alleged Ripple has illegally sold $1.39 billion in XRP since 2013.
Tetragon has said the action was brought following an investigation into Ripple by the U.S. SEC, which found the firm had engaged in the sale of unregistered security by selling $1.39 billion in XRP since 2013. In a teleconference ruling, Vice Chancellor Zurn said Tetragon had “bargained for a prompt redemption right in the event of a default, presumably to capture value before it evaporates,” before “the plug was pulled out of the bathtub and value started to go down the drain.”
Ripple ordered to maintain the same net position without necessarily preventing the individual sale.
While viewing the request for a total halt as “heavy-handed,” the judge ordered a net-zero requirement on Ripple, effectively forcing them to maintain the same net position without necessarily preventing individual sales – described as a “less burdensome way” of restraining the activities of Tetragon. Attorney David M. Grable, representing Ripple, denied the order should have been granted, saying, “this is a textbook case for no TRO. What Tetragon wants is the payment of money, a quintessential reparable harm case.” Since SEC brought the lawsuit against Ripple, several crypto exchanges in the US have delisted XRP from their platforms.