Blockchain firm Ripple is facing another lawsuit after the recent SEC action against the company. Tetragon Financial Group filed a complaint against Ripple Labs in Delaware Chancery Court and asked the San Francisco-based company to redeem Tetragon’s Series C preferred stock. XRP reacted negatively to the news and dropped nearly 5% following the news. Litecoin has taken over XRP to become the fourth most valuable cryptocurrency in the world. Tetragon requested the Court to block Ripple from using cash and other assets until the payment is made, as reported by Bloomberg.
Tetragon also requested a preliminary injunction and a restraining order against Ripple.
In addition to the redeem request, the financial services group also requested an expedited trial, a preliminary injunction, and a restraining order against the blockchain firm Ripple. However, Ripple dismissed the basis of the lawsuit and mentioned that it has no merit. “In Ripple’s Series C investment agreement, there is a provision that if XRP is deemed to be a security on a go-forward basis, then Tetragon has the option of having Ripple redeem their Ripple equity,” the firm noted in an official announcement.
Troubles continue to snowball for Ripple.
Ripple further mentioned, “we are disappointed that Tetragon is seeking to unfairly take advantage of the lack of regulatory clarity here in the U.S. The courts will provide this clarity, and we are very confident in our position.” Ripple faced a lawsuit filed by the SEC last month in which the financial regulator termed XRP as a security and mentioned that the company and its two executives were conducting a $1.3 billion unregistered securities offering. The lawsuit mentioned the names of CEO Brad Garlinghouse and the co-founder Chris Larsen.