One of Ripple Labs' big financial backers is looking to reverse its bet on the XRP issuer.

Tetragon Financial Group LTD, the multi-billion asset manager-turned-plaintiff, had led Ripple's $200 million funding round in December 2019. On Monday night the U.K.-based firm moved to exit its position in a sealed filing in Delaware Chancery Court, according to Bloomberg.

Just weeks ago the U.S. Securities and Exchange Commission put Ripple's future in doubt with a blockbuster suit alleging XRP to be an unregistered security. That's spooked the XRP markets and now, apparently, Ripple investors, too.

Tetragon seeks to “enforce its contractual right to require Ripple to redeem” Series C preferred stock, Bloomberg reported. In the meantime, Tetragon wants the court to essentially freeze Ripple's liquid assets until it pays.

Ripple rejected the lawsuit Tuesday. In a legal filing shared with CoinDesk the fintech said Tetragon can only opt to flip its Ripple equity back to cash "if XRP is deemed to be a security on a go forward basis."

"Since there has been no such determination, this lawsuit has no merit. We are disappointed that Tetragon is seeking to unfairly take advantage of the lack of regulatory clarity here in the U.S. The courts will provide this clarity and we are very confident in our position."

The filings were not immediately available at press time.