Securities and Exchange Commission (or (1) another governmental authority or (2) a governmental agency of similar stature and standing) to constitute a security on a current and going forward basis (and not, for the avoidance of doubt, a determination that XRP was a security in the past).7 If a Securities Default occurs, Tetragon may demand redemption of its shares via a “Redemption Request.”8 Following receipt of a valid Redemption Request, the Stockholders’ Agreement requires Ripple to redeem Tetragon’s shares within sixty days and apply all of its legally available cash and other assets to the redemption.9 4 Id. 2021-0007-MTZ Ma of 22 company.4 Plaintiff, through its affiliates (collectively, “Tetragon”), holds a majority of Ripple’s Series C preferred stock.5 Ripple and Tetragon executed a stockholders’ agreement dated Decem(the “Stockholders’ Agreement”) memorializing Tetragon’s investment and status as “Lead Purchaser.”6 Pursuant to that agreement, Tetragon has a redemption right that is triggered upon a “Securities Default” as defined in Section 5.4: A “Securities Default” means if XRP is determined on an official basis (including without limitation by settlement) by the U.S. BACKGROUND Ripple is an enterprise blockchain company.2 It uses a cryptocurrency called XRP in its payment network, and hosts a platform, RippleNet, to facilitate transactions.3 Plaintiff Tetragon Financial Group Limited is an investment 1 Docket Item (“D.I.”) 120. (“Ripple”) has moved for summary judgment (the “Motion”).1 For the following reasons, I grant Ripple’s Motion. 2021-0007-MTZ Dear Counsel: In this expedited contractual dispute, defendant Ripple Labs, Inc. Schulman, Esquire Abrams & Bayliss LLP 20 Montchanin Road, Suite 200 Wilmington, Delaware 19807 Tetragon Financial Group Limited v. Taylor, Esquire Ross Aronstam & Moritz LLP 100 South West Street, Suite 400 Wilmington, Delaware 19801 RE: Michael A. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734 MaGarrett B. XRP lost 46% of its value since January 1, while the second worst performer, ETH, lost 6.4%.COURT OF CHANCERY OF THE STATE OF DELAWARE LEONARD L. 2019 has been a year to forget for XRPĢ019 has been a very poor year for XRP so far as it is easily the worst performing top 10 cryptocurrency of the year. So far, the company has matched this plan with its actions – its Q3 2019 XRP sales amounted to $66.2 million, while it sold $251.5 million worth of XRP in Q2. Ripple periodically sells portions of its XRP holdings, although the company states it plans to reduce its XRP sales moving forward. ODL corridors involving the Phillipine peso and the Australian dollar are active as well, and there are also tests with transfers involving the Brazilian real. MoneyGram is now using the XRP-powered ODL product commercially, and it represents 15% of the company’s volume in the US dollar – Mexican peso corridor. Ripple has been pushing for the adoption of XRP – most notably, it signed a deal with remittances provider MoneyGram and invested a total of $50 million in the company. Ripple is the biggest holder of XRP, although a large portion of its holdings is locked up in escrow. Ripple says that the investment will also be used to increase the utility of XRP, a cryptocurrency that’s used in Ripple’s On-Demand Liquidity product for cross-border payments. Meanwhile, Brad Garlinghouse said that the $200 million was not a necessity for Ripple, but will provide balance sheet flexibility to the company. A Ripple spokesperson also told the publication that the company plans to hire up to 150 additional employees in 2020. As others in the blockchain space have slowed their growth or even shut down, we have accelerated our momentum and industry leadership throughout 2019.” Ripple is valued at $10 billion, but XRP has been underperforming its top 10 counterpartsĪccording to a Fortune report, the deal values Ripple at $10 billion. “We are in a strong financial position to execute against our vision. Ripple CEO Brad Garlinghouse said that Ripple is positioned particularly well compared to some of its counterparts in the blockchain industry: SBI Holdings and Route 66 Ventures also participated in the investment. US-based fintech firm Ripple has scored another major investment – today, the company announced that it has raised a whopping $200 million in Series C funding in an investment round led by Tetragon.
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