UK-based investment firm Tetragon Financial Group is suing Ripple, the tech company behind the cryptocurrency XRP, according to a report from Bloomberg.
The new suit was prompted by the SEC’s own legal action against the company—the regulator has alleged that XRP is an unregistered security and that Ripple's sales of it were illegal. The Commission is now suing for $1.3 billion.
Bloomberg notes that Tetragon filed the complaint under seal on Monday in Delaware’s Court of Chancery; the filing specifically asks that the firm’s preferred Series C Ripple stock be redeemed.
Tetragon has also asked the court for an expedited trial, a preliminary injunction, and a temporary restraining order against Ripple.
Tetragon led Ripple’s Series C funding round back in 2019, which raised a total of $200 million. In a statement issued earlier today, Ripple said the terms of that deal included a provision "that if XRP is deemed to be a security on a go forward basis, then Tetragon has the option of having Ripple redeem their Ripple equity."
The statement continued: "Since there has been no such determination, this lawsuit has no merit. We are disappointed that Tetragon is seeking to unfairly take advantage of the lack of regulatory clarity here in the U.S. The courts will provide this clarity and we are very confident in our position."
The SEC’s lawsuit against Ripple provokes existential questions for the company and its token—if XRP is a security, as the regulator alleges, and the company has been selling it illegally, it could mean the end for one of the biggest players in the crypto market.
Since the SEC announced legal action against Ripple in December, most major exchanges have halted all XRP trading, which has cost the token a significant chunk of its value; earlier today, it dropped from the fourth largest cryptocurrency by market capitalization to the fifth. It was third in December.
Editor's note: This story was updated after publication to include Ripple's response to to Tetragon's lawsuit.