Even if it announced in advance that it had received the SEC prosecution letter, Ripple failed to prevent panicking investors from leaving the market.
In addition to the plummeting currency price, the negative impact of the positive “sniping” of XRP by the regulators is still fermenting. Unlike Telegram and Kik, the SEC directly named the two core figures of Ripple in this lawsuit against Ripple: CEO Brad Garlinghouse (Brad Garlinghouse) and co-founder Chris Larsen (Chris Larsen), Directly pointed out that the two people raised funds by issuing tokens without registration, and manipulated the price of XRP through the use of dealers to make a profit of more than $600 million.
As a project that appeared before Bitcoin, Ripple has been trapped in a whirlpool of public opinion about high-level disagreements and team cashing since the issuance of its tokens. It once went to court in 2014 with the founder who had left.
In the 71-page prosecution file published by the SEC, Jed McCaleb was not mentioned. In the past few years, the co-founder who received 9.5 billion XRP has already He 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 have a lot of chips. What happened to Ripple that year?
Ripple’s predecessor: RipplePay
Today’s Ripple has long since deviated from the original track.
Ripple’s history can be traced back to 2004. The project “RipplePay” created by the developer Ryan Fugger, the core is to build a peer-to-peer payment network that can replace the banking financial system, which sounds very similar to Bitcoin.
In 2011, Bitcoin was known to more and more people, and RipplePay seemed to have encountered a bottleneck, because every link in the trust chain was not always credible. In May of the same year, Jed McCaleb, an early Bitcoin developer, joined the company, possibly to solve the “defects” of the project.
McCaleb is a man with a story. He founded Mt.Gox in 2010 and sold the platform to Mark Karpeles (Mark Karpeles) in March of the following year. The researchers later analyzed the reasons for the defeat of Mt.Gox. Mentougou was being killed by McCuller. Liquidity problems have already occurred when the cloth is sold, with a gap of 80,000 Bitcoins.
Because of his physical illness, Fuge gradually passed control of the company to McCaleb. In 2012, McCaleb hired Chris Larson, the former chairman and CEO of P2P lending platform E-Loan, as the company’s CEO. The arrival of Larsen also marked the beginning of a new era for Ripple.
Under his leadership, Ripple caught up with the wave of blockchain projects and successfully completed the commercialization. At that time, Bitcoin had become the 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 counterparties. In order to solve the problem, the company decided to set up a Ripple Gateway, which can be said to be a compromise, combining traditional financial institutions with a peer-to-peer network.
In September 2012, Kraken founder and CEO Jesse Powell (Jesse Powell) and another investor participated in Ripple’s first round of investment, with an investment of approximately US$200,000.
Three people share 20 billion XRP
In January 2013, the team started to promote the issuance of tokens. As the company was controlled by McCaleb and Larson, the two conspired to take 9.5 billion tokens each, and this seemed extremely unreasonable distribution method. The origin of the dispute.
According to the token distribution plan, the total amount of XRP is 100 billion, of which 80 billion will be allocated to the company, and 20 billion will be given to the three founders. Among them, Larsen and McCaleb will each receive 9.5 billion, and the other mysterious, never After showing up, the founder Arthur Britto, who was once thought to be nonexistent, took 1 billion.
Due to differences in ideas and Larson, who was good at capital operations, received support from a new investment institution at the time, McCaleb was “forced” to leave Ripple, and early Bitcoin follower Stefan Thomas took over as technical director A post. In order not to affect the token issuance, 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 early investors are very dissatisfied with Ripple. In May 2014, Kraken founder and CEO Jesse Powell posted a message saying that he did not get the reward he deserved.
In his opinion, the reason why Ripple can achieve such an achievement is entirely based on the company’s resources, and McCaleb and Larson are simply unreasonable to allocate XRP to themselves, and ask them to return XRP to the company.
“Before McCaleb left, I asked the founder to return the tokens to the company. McCaleb agreed, but Larsen refused.” Several people negotiated many times, but Larsen never agreed. McCaleb said that Larson could have a certain bargaining chip, but in the end he did not return it, and this led to a series of subsequent disputes.
Questions about the unreasonable token distribution plan have been surrounding Ripple.
When McCaleb left, people worried that he would smash his nearly 10 billion XRP into the market, causing the price to collapse. In order to calm the people’s hearts, McCaleb and Ripple reached an agreement to stipulate the amount of cash that can be cashed in the next few years.
At the beginning, the agreement was well implemented. But it didn’t take long for the agreement to rely solely on consciousness to be violated.
Later litigation documents revealed that McCaleb’s relatives sold 96 million XRP to Ripple for $1 million. Ripple, who received the coins, turned around and asked Bitstamp to freeze the other’s account, backhand accusing it of violating the agreement.
Ripple and McCaleb had an incomparable battle. In 2015, Bitstamp, which was involved in it for no reason, had to take both parties to court to determine the final solution. This lawsuit lasted until February 2016, when the two parties settled and made new adjustments to McCaleb’s XRP lock-in agreement.
The “golden master” behind Ripple
Although even the co-founder has left, Ripple is still highly sought after. Judging from Ripple’s hundreds of business partners, it is estimated that the later ChainLink is not comparable.
The reason why Ripple is so popular is that in April 2013, Ripple received US$1.5 million in financing from Google Ventures, a16z, IDG Capital Partners, Lightspeed Venture Partners, Bitcoin Opportunity Fund and Vast Ventures.
In addition to the endorsements of Google Ventures and Lightspeed Ventures, there seems to be a Japanese consortium behind Ripple. In September 2016, the Japanese consortium SBI Group acquired 10.5% of Ripple’s shares for US$55 million. The two parties also jointly established SBI Ripple Asia in 2017, which is 60% owned by SBI Group.
Although controversy continues, Ripple has also been on the glorious hall.
On January 4, 2018, the price of XRP rose to a historical high of US$3.31, an increase of more than 500 times in a year. The total market value is equivalent to that of Google, Apple and Alibaba. Larson also squeezed out with a value of US$59 billion. Zuckerberg became the fifth richest man in the world. Of course, the outside world also commented on him as “the richest man with the smallest contribution to the real world.”
On December 23, Ripple and two executives were sued by the SEC. This is not the first time Ripple has been involved in the lawsuit. However, the outside world agrees that the challenge that Ripple faces may be more serious than the previous founders dispute and even the lawsuit with R3. In the face of the SEC’s complaint, CEO Brad Garlinghouse has not yet revealed any signs of reconciliation, and he is “ready to fight” and “the fight has just begun.”
The lessons learned from Telegram and Kik are still vivid, and it is difficult to draw conclusions about whether Ripple will become the first other than Tether, the top three in total market capitalization, but the old encryption project that was removed by the trading platform in the end. After all, except for institutional investors, ordinary XRP investors will not watch their assets return to zero.
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