Ripple Settles $1 Million Lawsuit With Former Executive and Founder
A months-long legal dispute involving distributed ledger tech startup Ripple and its co-founder Jed McCaleb has come to an end.
UPDATE (12th February 19:52 BST): This report has been updated with comment from Ripple.
A months-long legal dispute involving distributed ledger technology startup Ripple and its co-founder Jed McCaleb has come to an end.
Though the settlement was announced in an 11th February post on the main Ripple forums, the dispute dates back to last spring when digital currency exchange Bitstamp filed suit over dueling claims on nearly 100m XRP – the native token of the distributed Ripple network – an amount worth just over $1m when the suit was filed.
At the time, Ripple alleged that McCaleb had violated a 2014 agreement governing the sale of his XRP holdings, numbered at 9 billion tokens at the time. The startup further alleged that McCaleb, in conjunction with members of his family, sought to circumvent the agreement in order to sell the XRP beyond its contractual controls.
In turn, McCaleb disputed the allegation in court, and the case ultimately grew to include the Stellar Development Foundation, the organization overseeing work on the Stellar network, a fork of Ripple that McCaleb launched as a separate company and technology provider in July 2014.
According to the new agreement, Ripple has released all claims to the dispute XRP, and will pay legal fees incurred by Bitstamp during the proceedings.
The disputed funds, which were deposited with the US District Court for the Northern District of California during the course of the trial, will be released to Stellar.
As part of the settlement, McCaleb has sold his equity in Ripple, and has agreed to sale controls on 5.3bn XRP owned by him and his children. An additional 2bn XRP will be donated to an as-yet-undisclosed charitable fund.
The sale controls are tied to daily volume in XRP markets. For the first year, according to Ripple, McCaleb will be unable to sell more than 0.5% of average daily volume "for each day of the week, including weekends and holidays".
During the second and third years of the agreement, this amount grows to 0.75%, while it accounts for 1.0% in the fourth year. Beyond the fourth year, the amount is set to 1.5%.
"The results of this settlement agreement show that I fully complied with the terms of the previous agreement. Personally, I am excited to see the conclusion of these baseless allegations," McCaleb wrote in a blog post following the announcement of the settlement.
In its announcement of the settlement, Ripple wrote that it was "pleased" with the outcome, going on to say:
Ripple, which declined to comment further when initially reached, later told CoinDesk in a statement: "We think this is a positive development that allows all parties to move forward with final resolution."
Image via Shutterstock
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