Tetragon Financial Group, which filed a lawsuit to get back its $175 million investment in Ripple Labs, lost its bid as a Delaware court ruled against the UK-based company’s claims.
The investor’s attempt to reclaim part of its $200 million investment in Ripple’s Series C round came with a lawsuit filed in January. Its claims were based on the Securities and Exchange Commission’s allegations over the unregistered security status of XRP.
“But, XRP is no more a security after the SEC filed the enforcement action than it was before it,” the Delaware Judge said in the ruling on Friday. “A determination…resolves the question of whether XRP is a security.”
“The enforcement action, by contrast, asks that question. The question is not yet resolved, so a determination has not yet been made. And when it is made, it will be made by the District Court,” the Judge added.
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The Big Crypto Case
The SEC alleged that Ripple raised $1.3 billion since 2013 with the sale of XRP, an unregistered security, and thus violated the United States securities act. Tetragon sought the freeze of Ripple’s assets if the company failed to return the investment proceeds.
Ripple harshly criticized the intentions of Tetragon, calling the lawsuit “an opportunistic move to take advantage of the SEC’s allegations.”
“What has always been clear (and made so, even more, today) is that the SEC still has to try to prove their case in Court; which we do not believe they will be able to do,” Ripple added. “As our lawyers have said publicly, the SEC is ‘dead wrong’!”
Furthermore, the lawsuit named Chris Larsen and Brad Garlinghouse, and both recently filed motions seeking dismissal of charges against them. The twin letters pointed out the lack of solid evidence against Ripple in the SEC lawsuit and also questioned the regulator’s jurisdiction in the case.