R3 is suing fellow blockchain startup Ripple, alleging that the latter company improperly attempted to terminate an options contract. Ripple has filed its own lawsuit, saying that R3 failed to deliver on its commitments to promote Ripple‘s technology and provide access to a network of banks.
In September 2016, the two companies entered an agreement giving R3 the right to purchase up to 5 billion XRPs for $0.0085 per unit until September 2019, according to a lawsuit filed by R3 in the Delaware Chancery Court on Friday.
In June 2017 Ripple’s Chief Executive Brad Garlinghouse attempted to terminate the options contract. R3 alleges that the contract does not give Ripple the right to terminate it unilaterally. R3 is asking the court to declare that it is entitled to all its rights, including purchasing the XRP anytime over the next two years.
Both R3 and Ripple develop blockchain technology for banks and other financial institutions and had entered the options agreement during discussions about potential collaborations, according to the lawsuit.
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XRP, which is a virtual currency that is traded against the U.S. dollar on cryptocurrency exchanges online, has soared in value to $0.20 since the companies entered the options agreement. This would make the option contract worth more than $1 billion.
Blockchain, which is best known as the system underpinning bitcoin, is a public online ledger of transactions maintained by a network of computers on the internet. Financial firms hope that the nascent technology can reduce the cost and complexity of burdensome processes such as international payments and securities settlement.
R3 launched in September 2015 with the backing of nine of the world’s largest investment bank and its membership has rapidly grown to about 80 financial institutions. In May it raised $107 million from companies including Bank of America Corp, SBI Holdings Inc, HSBC Holdings Plc, Intel Corp and Temasek Holdings.
Ripple, which focuses on blockchain-based cross border payments, works with many large banks and is backed by firms including Standard Chartered Plc, Accenture Plc, and SBI Holdings.
