What the SEC isn't telling you about Ripple
Even if it announced in advance that it had received the SEC prosecution letter, Ripple failed to stop panicked investors from leaving the market.
In addition to the plummeting currency price, the negative impact of regulators’ positive “sniping” on XRP is still Fermenting. Unlike Telegram and Kik, the SEC directly named two core figures of Ripple in this lawsuit against Ripple: CEO Brad Garlinghouse (Brad Garlinghouse) and co-founder Chris Larsen (Chris Larsen), Directly pointing out that the two raised funds by issuing tokens without registration, and manipulated the XRP currency price by sitting on the bank to make a profit of more than 600 million U.S. dollars.
As a project that appeared before Bitcoin, Ripple has been deeply involved in the vortex of high-level disagreements and team cash-outs since it issued tokens. Nian went to court with the founder who had left.
In the 71-page prosecution document released by the SEC, the name of Jed McCaleb was not mentioned. Over the past year, the co-founder who received 9.5 billion XRP has sold billions of XRP to the market, and his other identity is the co-founder of Stellar.
20 billion XRP was allocated to three team members, and very few people held a lot of chips. What happened to Ripple back then?
Ripple's predecessor: RipplePay
Today's Ripple has long deviated from the track when it was first created.
Ripple's history can be traced back to 2004, the project "RipplePay" created by developer Ryan Fugger, the core is to create a The peer-to-peer payment network of the banking and financial system sounds very similar to Bitcoin.
In 2011, Bitcoin became more and more familiar to people, and RipplePay seemed to have encountered a bottleneck, because not every link in the chain of trust was always available. Faithful. In May of the same year, Jed McCaleb, an early Bitcoin developer, joined the company, possibly to address the “flaws” in the project.
McCaleb is a man with a story. He founded Mt.Gox in 2010 and sold the platform to Mark Karpeles in March of the following year. The researchers later analyzed the reasons for the collapse of Mt.Gox. When the cloth was sold, there was already a liquidity problem, and the gap was as high as 80,000 bitcoins.
Because of his illness, Fugger gradually handed over control of the company to McCaleb. In 2012, McCaleb hired former chairman and CEO of peer-to-peer lending platform E-Loan Chris Larson as CEO. The arrival of Larson also marks the beginning of a new era for Ripple.
Early RipplePay (top) and later Ripple (bottom)
Under his leadership, Ripple caught up with the wave of blockchain project currency issuance and successfully completed commercialization. At that time, Bitcoin had become a representative of peer-to-peer transfers, and the community realized that the peer-to-peer structure did not seem to work, and ordinary users were unwilling to fully trust their counterparties. To solve the problem, the company decided to form a gateway (Ripple Gateway), which can be said to be a compromise that integrates traditional financial institutions with peer-to-peer networks.
In September 2012, Kraken founder and CEO Jesse Powell (Jesse Powell) and another investor participated in Ripple’s first round of investment. About $200,000.
Three people share 20 billion XRP
In January 2013, the team began to promote the issuance of tokens, because the company was managed by McCulle Boo and Larsen took control, and the two conspired to take 9.5 billion tokens each, and this seemingly extremely unreasonable distribution method was also the origin of the dispute.
According to the token distribution plan, the total amount of XRP is 100 billion, of which 80 billion are allocated to the company, 20 billion to the three founders, of which Larsen and McCaleb received 9.5 billion respectively, and the other A mysterious, never-seen-before, once-thought-to-be-non-existent founder, Arthur Britto, took 1 billion.
Due to differences in ideas, and Larsen, who was good at capital operations, won the support of a new investment institution at the time, McCaleb was "forced" to leave Ripple , early Bitcoin follower Stefan Thomas (Stefan Thomas) took over as technical director. In order not to affect the issuance of tokens, Ripple did not disclose the news of McCaleb's departure until May 2014, a year later.
The dispute between the founders is just the tip of the iceberg, and even the early investors are very dissatisfied with Ripple. In May 2014, Kraken founder and CEO Jesse Powell posted that he had not received what he deserved.
In his view, the reason why Ripple can achieve such achievements is entirely based on the company's resources, and it is not at all important for McCaleb and Larson to allocate XRP to themselves. Reasonable, and asked the two to return the XRP to the company.
“Before McCaleb left, I asked the founders to return the tokens to the company. McCaleb agreed, but Larsen refused. It’s done.” Several people negotiated many times, but Larsen always disagreed. Later, McCaleb refused to return it in order to have a certain bargaining chip against Larsen. This led to a series of subsequent disputes.
Questions about the unreasonable token distribution scheme have been surrounding Ripple.
When McCaleb left, there were fears that he would dump his nearly 10 billion XRP holdings into the market, crashing prices. In order to reassure people, McCaleb reached an agreement with Ripple, stipulating the amount that can be cashed out in the next few years.
At first, the protocol was well enforced. But it didn't take long before the pact to rely entirely on self-awareness was violated.
Later, the lawsuit revealed that McCaleb's relatives sold 96 million XRP to Ripple for $1 million, and Ripple, who received the coins, , turned around and asked Bitstamp to freeze the account of the other party, and accused it of violating the agreement.
Ripple and McCaleb got into a feud, and in 2015, Bitstamp, which was involved for no reason, had to take both parties to court to determine a final settlement . The lawsuit lasted until February 2016, when the two parties settled with new tweaks to McCaleb’s XRP locking protocol.
The "gold master" behind Ripple
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Although the co-founder has left, Ripple is still highly sought after, from hundreds of business partners of Ripple Looking at it, it is estimated that the later ChainLink will not be able to compare.
Ripple's many banking partners
The reason why Ripple The reason why it is so popular is that in April 2013, Ripple received $1.5 million in financing from institutions such as Google Ventures, a16z, IDG Capital Partners, Lightspeed Venture Partners, Bitcoin Opportunity Fund, and Vast Ventures.
In addition to the endorsement of Google Ventures, Lightspeed Venture Capital and other institutions, there seems to be a Japanese consortium behind Ripple. In September 2016, the Japanese consortium SBI Group acquired a 10.5% stake in Ripple for US$55 million. The two parties also cooperated to establish SBI Ripple Asia in 2017, which is 60% owned by SBI Group.
Although there are constant controversies, Ripple has also entered the hall of glory.
On January 4, 2018, the price of XRP once rose to a historical high of $3.31, an increase of more than 500 times in a year. The total market value is comparable to that of Google, Apple and Alibaba is comparable, and Larsen also squeezed out Zuckerberg to become the fifth richest man in the world with a net worth of US$59 billion. Of course, the outside world also evaluates him as "the rich man who has made the least contribution to the real world."
On December 23, Ripple and two executives were sued by the SEC. Tougher than previous founders' battles, even the lawsuit with R3. In the face of the SEC's complaint, CEO Brad Garlinghouse has not yet revealed a signal of reconciliation, "ready to fight" and "the battle has just begun."
The lessons learned from Telegram and Kik are still vivid, and will Ripple become the first company other than Tether to rank in the top three in terms of total market capitalization, but in the end it will be rejected? It is still difficult to draw conclusions about the old encryption projects that have been removed from the trading platform. After all, apart from institutional investors, ordinary investors in XRP will not watch their assets go to zero.
Reference article:
《5 alarming reasons Ripple might not be what you think》
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