SEC Document Gives a Hint of Ripple-R3 Option Deal Litigation Settlement Amount
Ripple and enterprise blockchain company R3 were involved in a legal tussle over an options deal which entitled R3 to purchase five billion XRP at a pre-determined price.
Crucial info about the clandestine settlement that happened in September 2018 was revealed in SEC’s legal documents submitted against Ripple.
The document states that ‘an enterprise software firm’ made use of its option to purchase 1.04 billion XRP last year. As there is no clarity on the date of sale of R3 tokens, based on the XRP’s price range over that period, the settlement amount is estimated to be in the range of $240 million to $470 million.
In the year through September 2019, which is the option expiry period, XRP traded in a price range of $0.24 to $0.47. Notably, $0.30 was the frequent transaction price.
In case, 1.04 billion XRP was bought at $0.24, which the lower end of the traded range, the final settlement price would be $240 million. There was a decline in the XRP price in the final leg of September.
Under an agreement between Ripple and R3, the latter was provided an option to purchase a maximum of 5 billion XRP at $0.85. Unconfirmed new reports indicate that the settlement amount was anything between $100 million and $1 billion.
Nevertheless, considering the fact that R3 continues to have robust balance sheet in spite of a significant burn rate and lack of fresh funding, it is clear that the figure was considerably above $100 million.
An excerpt from the SEC filing is provided underneath:
“in 2016, 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 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.”