Ripple co-founder Jed McCaleb has sold 157.9 million XRP ($86.8 million as of press time) on the open market from December 1st to December 9th. McCaleb’s latest sale took place this morning shortly after he received a 266.3 million XRP payment, in which he subsequently sold about 30 million XRP. After McCaleb sold his XRP this morning, the price of XRP fell by 6%.
The road to selling 9 billion XRP
Jed McCaleb was a member of Ripple’s founding team but left the project in 2013. When he left Ripple, he publicly announced that he was entitled to 9 billion XRP and that he would be selling his XRP on the open market as well as donating some of it to charity. At the time that McCaleb made this announcement, he also mentioned that two other Ripple co-founders were entitled to a total of 11 billion XRP and that the founding team gave the remaining 80 billion XRP to the company–which was called OpenCoin at the time but rebranded to Ripple on September 26, 2013.
What many people find even more concerning than McCaleb’s continuous dumps on the market, is the amount of XRP that Ripple Inc. owns and how they sell XRP on the open market themselves.
Ripple sells millions of dollars worth of XRP each quarter and said that if they did not sell XRP, then the company would not be profitable. According to several sources, Ripple Inc. holds roughly 50% of all the XRP in circulation–which many individuals see as problematic. With Ripple Inc. holding what is nearly a majority of XRP in circulation, and selling significant percentages of their holdings on the open market each quarter, those actions from the company are bound to harm the economics and market value of XRP.
In what seems to be an effort to combat the effects that Ripple Inc. is having on the value of XRP, Ripple Inc. has begun doing XRP buybacks each quarter, and says that “Ripple is purchasing – and may continue to purchase – XRP to support healthy markets.”