Ripple Labs’ 2019 funding round was supported by Tetragon in 2019. The British Fund Manager’s $200 million investment was previously applauded by crypto experts as the dawn of a new era for Ripple. Tetragon Financial Services led the Series C funding for the blockchain in 2019, and now, it wants its money back.
The round saw Ripple with a $200 million investment for its native currency XRP but with a clause. Now, those terms are haunting Ripple as Tetragon moves to pull out its investment after the United States Securities and Exchange Commission (US SEC) classified XRP as a security and sued the company for the unregistered securities offering and sales of the cryptocurrency.
Caption: Courts ruled against Tetragon’s claim about Ripple breaching their agreement
The British fund manager Tetragon claims that the US SEC’s lawsuit has seen part of its agreement with Ripple Labs Inc. contravened and that Ripple should pay $175 million worth of stocks back. The case was filed in January 2021 before Delaware’s Court of Chancery. However, the case has since been dismissed. As per the court’s ruling, the inconclusiveness of the classification of XRP remains, and that Ripple is not obligated to fulfil the terms of the 2019 agreement until a conclusion is reached.
Ripple stated its disappointment about the lawsuit from Tetragon and its decision to take advantage of the uncertainties surrounding the cryptocurrency industry in the US. Ripple viewed the lawsuit as an “opportunistic move” to profit from the current state of the crypto market in the country.
The lawsuit from Tetragon came quickly after the United States Securities and Exchange Commission filed a lawsuit against Ripple Labs and two of its Executives. XRP was shortly delisted by major crypto exchanges in the US and MoneyGram’s announcement to halt its partnership with Ripple.
Regardless, the XRP has seen a period of recovery in the past weeks. Most notably, it stayed green despite the whole crypto market seeing significant loses last week.