According to Reuters, last year, New York-based blockchain startup R3 Holdco LLC has sued rival company Ripple Labs Inc. over a contract to purchase R
According to Reuters, last year, New York-based blockchain startup R3 Holdco LLC has sued rival company Ripple Labs Inc. over a contract to purchase Ripple’s digital currency XRP, according to a lawsuit filed in the Delaware Chancery Court.
In September 2016 the two companies had entered an agreement giving R3, the right to purchase up to 5 billion XRPs at a price of $0.0085 per unit at any point by September 2019, according to the lawsuit.
In June 2017 Ripple’s chief executive Brad Garlinghouse attempted to terminate the options contract through an email to R3’s chief executive David Rutter, according to the lawsuit. R3 alleged that the contract does not give Ripple the right to terminate it unilaterally and is asking the court to declare that it is entitled to all its rights, including purchasing the XRP anytime over the next two years.
We know that Ripple Labs, and especially the CEO Chris Larsen own a substantial amount of XRP tokens making the platform literally “Centralized” in a “decentralized-based” scene. If R3 had the opportunity to buy XRP at any time until September 2019 what would they do? – Come on people, guess. – That’s right! They would use the opportunity to buy XRP tokens when they hit their all-time high, which was right before the big dive.
Of course Ripple chief executive wouldn’t like that and of course, he would try to cancel the deal since R3 could gain a 44705%+ simply by buying and instantly selling XRP on an exchange. With 5 million XRP as their cap according to the particular contract that would make R3 $19,000,000 USD at the expense of $42,500 USD in an instant.
So what was the best way to cut losses from Ripple’s side? They could manipulate their own market, selling their own stakes in order to short the price and eliminate 2/3 of the damage, giving R3 the option to settle at ~$7,000,000 with the current price. It’s either that, either Ripple being steady if not falling until September 2019 when the deal expires.
Being a monetary organization, I am confident that Ripple would take the hit, lose $7 mil to R3 and start rising again as soon as possible, otherwise, that steady $1,22 we are seeing nowadays will start to take the downfall day by day in the next month.
Finally, a current publication by Bloomberg titled “Banks Don’t Want Ripple’s $80bn of Digital Money” is having its own round of attraction. The video publication is clearly made up, but it seems to affect the investing crowd when it comes to trusting Ripple.
Source: The Independent Republic