According to news from the QLawЗ60 website, a US court in Delaware has issued a preliminary injunction against Ripple Labs. The order of the court prohibits the company from steering XRP transactions and buying back shares. In particular, the court ordered to maintain a zero balance of XRP cryptocurrency trading. The decree will remain in effect until “Tetragon can buy back its shares.”
The Lawsuit Drama
Based on a tweet from XRP community member WrathofKahneman, the court chairman said she considers Tetragon’s request to ban XRP outright “draconian.” For this reason, the court found it satisfactory to require Ripple to sustain a “net-zero” stance in XRP sales and purchases, rather than forcing them to completely stop acquisitions. ”
Apparently, the decision is based on the fact that Ripple is able to compensate for any loss in the value of shares, so it can wait for the decision of the SEC.
The SEC has launched a lawsuit against Ripple Labs for selling XRP as an unregistered security. Subsequently, the British asset management company Tetragon Financial Group LTD also filed a lawsuit against Ripple, insisting on a buyback of its shares. The firm contributed the most to the Series C funding round and owns $175 million in Series C shares, which is less than 2% of Ripple’s capital.
On January 7, Tetragon filed a lawsuit for a temporary injunction over a clause requiring Ripple to return shares in the event XRP is classified as a security. In its petition, Tetragon requested a ruling that would stop Ripple from using legally available cash or other liquid assets for any purpose other than converting its fully paid Tetragon Series C preferred stock.
Tetragon Rolling Back
However, Tetragon appears to be in advance of the outcome of the SEC’s lawsuit against Ripple. The British company believes that the lawsuit against Ripple Labs will affect the company’s share price. In this regard, the company argued its claim as follows:
“We strive to quickly buy back our shares, before their value begins to flow away, like water from a bath after pulling out the cork.”
As a supplement to the decline in the value of shares, among the reasons for filing a claim by Tetragon, user WrathofKahneman voices other facts. It is argued that the advance notice from the SEC, which the Commission sends to organizations before applying enforcement action against them, was a sufficient signal for the buyback of own shares. Tetragon also acknowledges that Ripple has the resources to repay this amount multiple times.
Moreover, the British company reported that Ripple allegedly threatened to file a counterclaim in order to dissuade the investor from going to court. In addition, the court chairperson said she would organize a preliminary hearing next month and, if necessary, a few days hearing in March.
