Ripple Labs won a victory in the legal battle with Tetragon Financial Group Ltd yesterday. Tetragon was the largest contributor to a Series C funding round in 2019 with $ 175 million, allegedly seeking to take advantage of Ripple’s contractual right to buy back the Series C preference share after the SEC case was filed.
Tetragon took a preliminary injunction on January 7 to win his right as quickly as possible.
As Ripple Labs General Counsel Stuart Alderoty explained a few hours ago, the Delaware court ruled that Tetragon’s “security default” claim was false because there was no formal ruling on the status of XRP. Judge Morgan T. Zurn therefore dismissed Tetragon’s request for injunction and revoked the earlier injunction.
The rationale states that Tetragon cannot demonstrate that the Wells notice or enforcement action is a security default. Hence, the asset manager failed to show the required probability of success on the merits of his claim.
In addition, Ripple Labs General Counsel, Stuart Alderoty, also referred to a current lawsuit filed by XRP owners (notably by lawyer John E. Deaton) against the SEC. The SEC stressed that the XRP has not yet made a decision on its status. The SEC said:
“The court hearing the SEC’s case against Ripple is” a special method for testing the validity “of the SEC’s claims against Ripple.”
Alderoty commented on his success against Tetragon with Deaton’s case:
“With the SEC’s filing in the Deaton case, the Tetragon decision should make us forget the FUD (Fear, Indecision, Doubt) that the SEC unilaterally decided that XRP was a” security “. Glad to understand! ”
Ripple Labs CEO Grad Garlinghouse criticized the SEC and the premature removal of XRP by crypto exchanges, voicing his opinion on both cases on Twitter:
“Therefore, regulation through sanctions causes such great damage. The SEC admits that they “did not determine” anything by filing a massive sanctions case, but the crypto markets (under pressure) interpreted the case as such and hurt retail owners greatly, and now the SEC has confirmed that no decision has been taken. He did not give an order on the XRP or asked anyone to stop / remove the trade, so retail owners should not blame the SEC, instead (wait) blame the exchanges! So who are they protecting ?! “