- A settlement in the lawsuit between Ripple and software company R3 is estimated at $240 million.
- These figures come from the documents of the SEC’s lawsuit against Ripple Labs published yesterday
As Crypto News Flash previously reported, the Security and Exchange Commission has filed a lawsuit against Ripple Labs, Brad Garlinghouse and Chris Larsen, for allegedly selling the unregistered security XRP to investors. The amount in dispute is more than $1.3 billion. The outcome of this case could permanently change the XRP price and the crypto industry.
Documents released by the SEC further reveal that software company R3 and Ripple may have agreed to a $240 million settlement in a lawsuit last year. Ripple granted R3 the right to purchase XRP at a predetermined price. According to news outlet Ledger Insights, legal documents show that an “enterprise software company” realized the option to purchase 1.04 billion XRP last year. The XRP price was $0.24 early last year and was $0.47 in September 2019, when the call option was executed. The exact wording in the SEC documents is as follows:
Ripple entered into an agreement with an enterprise software firm (“Option Investor B”) based in Manhattan that gave the firm an option to buy up to 5 billion XRP at a discounted price in exchange for efforts to help Ripple develop a “use” for XRP.
The SEC further states:
The amount of XRP available for purchase under the option was later reduced, and option Investor B purchased at least 1.04 billion XRP in 2019.
The dispute between R3 Corda and Ripple was settled in late 2018 when a successful settlement was reached, but its exact content remains confidential to this day. Ripple published only a short and concise statement at the time:
R3 HoldCo LLC, R3 LLC, Ripple Labs Inc. and XRP II, LLC announce that they have reached a settlement of all outstanding litigation between the parties. The terms of the agreement will remain confidential and both sides look forward to putting these disputes behind them.
XRP Price Continues to Be Under Pressure
The actual SEC lawsuit was preceded by an announcement on the part of Brad Garlinghouse, so investors were able to unceremoniously brace themselves for a potential price drop. Nevertheless, the price of XRP dropped from $0.57 to $0.22 within a short period of time, down more than 50%. At the time of writing, XRP managed to recover and rose to a price of USD 0.35. Thus, XRP recorded a 39% drop in the last 7 days.