Last updated on April 5th, 2015 at 09:57 pm
One of the largest bitcoin exchanges, Bitstamp, has started legal proceedings against Jed McCaleb for over almost 100 million XRP. Bistamp, which operates a gateway on the Ripple network, has filed a complaint against McCaleb and two other family members in the US District Court of Northern District of California. McCaleb founded Ripple Labs, but later decided to pursue another venture called Stellar. According to the complaint, Ripple Labs used approximately $1,000,000 dollars to purchase close to 100 million units of XRP, sold by an account allegedly held by McCaleb. The lawyer representing Bitstamp, George Frost, has said in a statement:
“Bitstamp was unable to resolve this demand with Ripple Labs. Given our inability to ourselves determine the facts underlying the ownership dispute, we decided that an Interpleader filing was the proper approach. Indeed, it is only method to resolve disputes in these difficult circumstances.”
According to an agreement that was struck in August of 2014, McCaleb is only allowed to sell $10,000 worth of XRP per week during the first year. Ripple Labs has informed Bitstamp of the contractual obligations that McCaleb is under, and now Bitstamp has asked the courts to resolve this dispute.
McCaleb alleges that the XRP that was offloaded on Bitsamp were not his, but were gifted to different family members before his agreement with Ripple Labs went into effect. McCaleb, believes he is not in breach of contract due to the involvement of his family members:
“I am 100% sure I am not in breach of any agreement with Ripple Labs and all evidence will support that,”
When McCaleb left Ripple Labs, he founded the Stellar network, an alternative cryptocurrency system very similar in design to Ripple. According to court documents, Ripple Labs has suggested that McCaleb’s reason for selling his Ripple holdings was to fund the development of the Stellar network. Two separate addresses were identified in the complaint that show large amounts of Ripple tokens (98,846,600) being put up for sale on Bitstamp on the 20th of March. On the same day, Ripple Labs bought an almost equivalent amount (96,342,361.6) of XRP tokens on Bitstamp. Bitstamp has alleged that the proceeds from those trades were used in an attempt to purchase Stellar tokens, and Bitstamp believes these attempts were made by McCaleb and/or one of his family members. Bitstamp froze the accounts that were involved in these large XRP transactions. The complaint is seeking to reverse the trades and return the funds to their original addresses.
Bistamp is seeking the permission of the court to be allowed to remain in possession of the funds involved in the problematic transactions until the matter is resolved. Bitstamp also seeks to be immune to any future litigation that can stem from this incident.