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Payment network and ex-employee’s company fight over funds

On Behalf of | Jun 12, 2015 | Uncategorized

Kansas digital currency investors may soon get to see how major legal battles impact market rates. In early June, it was announced that digital exchange Bitstamp was in the middle of an argument between payment network Ripple Labs and a company named Stellar Development Foundation. At the center of the dispute lie just over $1 million in funds that both parties claim are rightfully theirs.

Reports have indicated that the Stellar Development Foundation employee whom the dispute revolves around was the founder of Ripple Labs and received the funds when the company was created. The Ripple network, which employs a currency called XRP, claimed that the founder’s cousin illegally attempted to sell them the sums in question using the Bitstamp platform and that this action went against the terms of an existing settlement agreement. In May, a federal district court judge ordered that the money be temporarily frozen.

Bitstamp noted that it may become the subject of future legal action and filed a request to be dismissed or discharged from the case. Although the main two parties involved originally settled on a specific timetable that curbed how much XRP the founder could sell within a given time period, Ripple subsequently alleged that the man and his cousin were trying to sidestep the courts.

Breaches of contract come in many forms, so business disputes involving former employees and other parties may include breaches of fiduciary duty and have lasting impacts on a company’s ability to continue in operations. An attorney who has experience in business litigation might work with a company client in the preparation of employment and other agreements that could contain provisions dealing with how to proceed in the event of a dispute.