[dropcap size=small]I[/dropcap]n the wake of the troubling news about McCaleb’s XRP liquidation, Ripple board member Jesse Powell announced his resignation earlier today on Ripple’s subreddit, /r/Ripple. Powell, who is also CEO of the popular Bitcoin exchange Kraken, had some candid remarks about the company.
Today I have submitted my resignation from the Board of Ripple Labs. While I care about the people who work there and I wish the company the best, I cannot personally continue to support the business. I believe that the technology and the protocol hold great promise, and have since the beginning, which is why I was the company’s first investor. Since Jed’s departure, the management of the company has taken a different direction. Sadly, the vision Jed and I had for the project in the early days has been lost.
Powell also stated his displeasure at the founder of Ripple’s decision to allocate so much of the total stock of XRP to themselves. Like many Ripple believers, Powell had assumed that they would eventually return the XRP once the market had stabilized. However, they did not, and Jed McCaleb’s sudden decision to liquidate his XRP holdings demonstrates exactly how dangerous that centralization of funds is to the XRP market’s health. As Powell stated:
I’m no longer confident in the management nor the company’s ability to recover from the founders’ perplexing allocation to themselves of 20% of the XRP, which I had hoped until recently would be returned. Prior to Jed’s departure from Ripple, I had asked the founders to return their XRP to the company. Jed agreed but Chris declined—leaving a stalemate. This afternoon, I revisited the allocation discussion with the pair and again, where Jed was open, Chris was hostile.
Despite his strong feelings toward the way that Ripple’s management is conducting business, Powell wants to make clear that he does not harbor ill will toward the company.
As an investor, of course, I hope that Ripple Labs will overcome its hurdles and prove my lack of confidence misplaced. Unfortunately, unlike the founders, I don’t have swathes of XRP to dump if I don’t think it’s working out.
This bad news has not boded well for Ripple’s market stability. Since May 21, Ripple’s market cap has been on a vicious downswing. The bulk of this downswing resulted from McCaleb’s sell-off, which flooded the market with XRP and greatly reduced investor confidence. Ripple’s price has fallen from a mean of around $.006 to as low as $.003, halving its value in less than 48 hours.
It is unclear how Jesse Powell’s resignation will affect the price of Ripple, but his negative comments about Ripple management will not do much to restore investor confidence in the company. The next several weeks will be critical for Ripple if as it seeks to retain its prominent place in the cryptocurrency community.
Last modified (UTC): May 24, 2014 09:29