Blockchain Developers Face Off Over $1 Billion in Digital Cash

Two of the world’s largest blockchain developers are battling over more than $1 billion in virtual-currency options, in a dispute that may help establish the leading player in providing new payment technologies to financial companies.

R3, a blockchain startup that leads a group of more than 100 firms, sued rival Ripple Labs Inc. in state court in Delaware Friday, accusing it of reneging on an options agreement for Ripple’s XRP digital currency that is now worth more than $1 billion. Ripple filed its own suit in California accusing R3 officials of duping them on other agreements.

The suits are a sign of a break between R3 and Ripple, which used to partner on developing digital-ledger technology, or blockchain, for financial institutions but are increasingly competing for customers. That technology allows digital information to be distributed securely, and prevents double booking, a critical requirement for virtual currency.

Winning access to digital assets worth more than $1 billion could give New York-based R3 a funding boost and a leg up in the competition with San Francisco-based Ripple and other rivals.

“R3 does not discuss the details of pending litigation,’’ Charley Cooper, managing director, said in a emailed statement. “We are confident in our position and hope for a speedy resolution of this matter.’’

Monica Long, Ripple’s vice president of marketing, said in an emailed statement that its filing is straightforward: “R3 misrepresented their ability and intent to deliver on their commitments.’’

Bitcoin Surge

In the Delaware Chancery Court suit, R3 executives accuse Ripple Chief Executive Officer Brad Garlinghouse of abruptly canceling its options agreement covering 5 billion XRP after the price of cryptocurrencies shot up.

The agreement called for Ripple to sell the XRP at $0.0085 each, but Garlinghouse balked after the value of the currencies jumped to $0.2293505 each, or more than $1 billion, according to the suit. The agreement, signed in September 2016, didn’t give Ripple officials “the right to unilaterally terminate’’ the pact, according to R3’s suit.

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