E L Emerson
Embattled upstart Ripple, which staged an altcoin coup just 10 days ago by taking over from Ether as the world’s second largest cyrptocurrency, is now fighting challengers both on and off the exchanges.
The company’s XRP altcoin product has seen its value drop by 14% in recent trading (see Cryptocurrency Wars), as the fallout from an agreement made 18 months ago by Ripple’s then CEO Chris Larsen with bank consortium R3 now has the Francisco-based business facing a potentially long and costly legal battle.
The issue stems from a decision by Mr Larsen in the summer of 2016 to sign a deal with R3 that included an option for its partner to buy 5 billion units of its currency for less than a penny.
Ripple has since grown XRP’s value from circa $200 million a year ago to an estimated $100 billion according to recent estimates, meaning that option contract is now worth about $12 billion.
Now, in the latest twist of what has become a bitter $multi-billion legal battle, Ripple has accused R3 of bad faith and using the partnership to develop a competitive product, filing a counterclaim in New York.
R3’s contract opens up the option to purchase almost 10% or 55 billion of the XRP currently controlled by Ripple.
Neither Ripple nor R3 have commented publicly on the latest developments in the ongoing legal dispute.
For now, Ripple still remains the world’s third largest cryptocurrency and has had a recent run of success in persuading more than 100 banks to use its blockchain tools.
The blockchain software technology that drives cryptocurrencies by creating an immutable record of transcations is believed by many in the global financial community to provide a cheaper and faster future option to legacy money and settlement systems.
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