Key Takeaways
- ZachXBT slams Ripple, saying XRP holders serve only as exit liquidity for insiders.
- Criticism intensifies as co-founder Chris Larsen continues large-scale XRP sales.
- The investigator refused to help a scam victim, citing Ripple’s MLM-like structure.
On-chain sleuth ZachXBT reignited long-standing concerns about Ripple’s centralization and insider selling, branding XRP holders nothing more than “exit liquidity” for its founders.
ZachXBT, one of crypto’s most prominent on-chain sleuths, is known for exposing fraud and helping victims recover stolen funds.
However, when an XRP user asked for his help tracking $33,000 in stolen tokens, he refused — citing his unwillingness to support the Ripple community.
ZachXBT: “I Discriminate Against MLM Chains”
The dispute began when an X user named Miguel Morales sought assistance tracing his stolen XRP.
ZachXBT advised filing an IC3 report and working with exchanges, but he refused to personally get involved.
His explanation was blunt: Ripple, he argued, does not fund public goods or support its community, unlike other blockchains.
In follow-up posts, ZachXBT went further, accusing Ripple of operating like a multilevel marketing scheme.
“XRP holders provide nothing of value to the industry except exit liquidity for insiders,” he wrote. He later quipped: “I discriminate against MLM chains.”
He compared Ripple’s ecosystem to Cardano, Pulsechain, and Hedera — projects he views as overhyped and overly centralized.
Larsen’s Sales Reignite Concerns
The timing of ZachXBT’s criticism coincides with a renewed focus on Ripple co-founder Chris Larsen’s selling activity.
Larsen, who still controls between 2.58 and 2.81 billion XRP across multiple wallets, has reportedly sold 107 million XRP — worth roughly $3.3 billion — since November 2024.
The sales have fueled old concerns about Ripple’s supply dynamics.
At launch in 2012, 100 billion XRP tokens were created, with 80 billion allocated to Ripple Labs and 20 billion to its founders.
To address fears of market flooding, Ripple placed 55 billion tokens in escrow in 2017, releasing up to 1 billion monthly.
However, insiders’ continued sales have long been a sticking point for critics.
Success Meets Skepticism
Ripple’s supporters argue that 2025 marks a turning point.
With the Securities and Exchange Commission (SEC) lawsuit dismissed, Ripple has been able to expand aggressively in the U.S., inking new partnerships and acquisitions that boosted investor sentiment.
XRP crossed $3.80 earlier this year, hitting fresh all-time highs.
However, ZachXBT’s commentary has brought a dose of skepticism back into the conversation.
His refusal to assist an XRP scam victim underscored his broader argument: that Ripple’s structure, dominated by founders with billions in reserves, remains a systemic weakness despite the company’s recent wins.
For critics, the question is simple — can Ripple ever shake off the image of centralization and insider dumping, or will XRP holders always be the liquidity exit door for its founders?
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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