Distributed ledger startups Ripple and R3 have become embroiled in a new legal battle, with both startups filing lawsuits related to a contract dispute between the two firms.
Ripple alleged in a complaint filed today in the Supreme Court of California that R3 failed to honor an agreement that included an option to purchase 5 billion XRP, the cryptocurrency of Ripple’s distributed ledger network. According to Reuters, R3 asked the Delaware Chancery Court to uphold the deal, which would have allowed it to buy the XRP at a price of $0.0085 per token before September 2019.
Currently, XRP is currently trading at roughly $0.21 apiece, according to data from CoinMarketCap.
A copy of R3’s complaint was not available at press time. According to Ripple’s complaint, R3 and Ripple allegedly struck a deal to create a joint commercial venture, which would have followed an earlier test, centered around XRP, that involved a number of banks involved with R3’s consortium effort.
In the complaint, Ripple accused R3 of failing to uphold its end of the bargain as its fundraising efforts picked up steam, ultimately concluding with a $107 million funding round announced this spring.
Ripple also accused R3 of hiding the fact that several of its consortium members, including Goldman Sachs and Banco Santander, among others, were looking to exit the group despite promises of advancing XRP to the banks involved.
“Our filing is straightforward – R3 misrepresented their ability and intent to deliver on their commitments. Given XRP’s ~4000% increase over the course of the year, R3 suddenly wants to tap into the value of XRP, though the facts are clear that they did not earn any option based on our agreement. We wish them well as they continue to try and build their consulting practice. In the meantime, Ripple is focused on serving our ecosystem of nearly 100 customers and signing up more.”
When reached, a representative for R3 declined to offer specifics on the case but struck an optimistic note about the firm’s prospects in court.
“R3 does not discuss the details of pending litigation,” the spokesman said. “We are confident in our position and hope for a speedy resolution of this matter.”
The suit is a notable one, given that R3 and Ripple are two of the industry’s best-funded startups and both focus their products primarily toward financial institutions. R3 and Ripple have raised $107 million and $96 million, respectively, in venture capital to date.