The blockchain payment network Ripple and its managing entity Ripple Labs have come under fire for allegedly misleading representations regarding the creation of XRP tokens. Critics argue the company falsely claims to have "discovered" rather than created the cryptocurrency.
The Controversy Explained
On October 9, Nic Carter, co-founder of Coinmetrics.io and partner at Castle Island Ventures, ignited a heated Twitter debate by accusing Ripple of obscuring the true nature of its relationship with XRP:
"For the record, these psychopaths still unironically say they 'discovered' XRP rather than creating it."
Carter's tweet referenced an earlier post by journalist Cory Johnson, a former Bloomberg TV host who served as Ripple’s Chief Market Strategist from March 2018 to February 2019. On October 5, Johnson analogized Ripple’s XRP ownership to Chevron’s relationship with oil:
"Ripple’s relationship to XRP is like Chevron’s relationship to oil. We own a lot of XRP, we believe it’s a superior technology, and we support its use for myriad reasons. But we don’t own all XRP, we don’t control it, and we aren’t it."
Johnson also linked a 2018 article by lawyer Preston Byrne, which traced the origins of XRP through corporate filings and founder agreements. Byrne concluded:
"Before Ripple Labs’ incorporation on September 19, 2012, there was no ‘official ledger’ containing XRP or any transactions on it."
This directly contradicts Ripple CEO Brad Garlinghouse’s prior statements emphasizing XRP Ledger’s pre-corporate existence.
Core Issues Under Scrutiny
The Twitter debate revived longstanding disputes, including:
- Centralization Concerns: Ripple’s influence over XRP (estimated to control 60% of tokens).
- Regulatory Classification: Whether XRP qualifies as a security.
- Price Manipulation Allegations: Accusations of artificial inflation.
- Token Ownership: Transparency over holdings and distribution.
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Legal and Market Implications
The controversy has fueled multiple lawsuits, with outcomes potentially reshaping cryptocurrency regulations. Key questions include:
- Does XRP’s utility as a payment token exempt it from securities laws?
- How does Ripple’s stewardship impact decentralization claims?
FAQs
Q: Did Ripple create XRP?
A: Critics argue yes, citing corporate records; Ripple claims it only "adopted" the pre-existing ledger.
Q: Is XRP centralized?
A: With Ripple controlling most tokens, concerns persist about centralized influence.
Q: Could XRP be classified as a security?
A: Ongoing lawsuits may determine this, impacting its legal status globally.
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Conclusion
The debate underscores broader tensions in crypto between transparency, regulation, and decentralization ideals. As legal battles unfold, Ripple’s narrative—and XRP’s future—remains in flux.