Ripple CEO Chris Larsen to Donate 7 billion XRP to the Underbanked

Journalist:
Josiah Wilmoth @Y3llowb1ackbird
May 27, 2014
Photo by _Mo

Ripple Labs has weathered a difficult week that seemed like it could only get worse. The company’s co-founder publicly announced he was liquidating his XRP holdings, which caused investor panic and caused the price of XRP to drop over 50%. Soon after, a prominent Ripple board member resigned from the company, leaving behind some strong words for the Ripple leadership team. The company responded by sending him a cease and desist letter, which he posted online alongside an emotionally charged response. It seemed as though Ripple Labs was headed for a messy legal battle, which it still may be. However, things are looking up for Ripple investors.

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Ripple CEO Chris Larsen to Donate 7 billion XRP to the Underbanked

[dropcap size=small]J[/dropcap]esse Powe’ll comments about Ripple management resonated with many investors. While some believed the dispute between Powell and Ripple was a mere personal dispute every company experiences, other investors echoed his concerns about the Ripple co-founders’ decision to allocate large amounts of XRP to themselves. 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.

In an official forum post, Ripple Labs Director of Communication Monica Long addressed these concerns. Long states that co-founder Chris Larsen has already begun the process of creating an independent foundation that he would use to distribute his founders’ XRP–worth over $29 million at the time the article was written–to people who do not have access to the financial banks and services that people in the first world do. Most notably, Larsen committed to this plan without assurance from his fellow co-founders that they would follow his example.

CEO Chris Larsen has authorized the creation of a foundation to distribute his donation of 7 billion XRP to the underbanked and financially underserved. This plan has previously been in development but is now being accelerated and finalized independent of a formal agreement amongst all the original founders. He believes this is both the right thing to do and the best way to remove further distractions in pursuit of the broader vision of the company. Details of the foundation, its independent directors, and the giveaway will be forthcoming.

Building Investor Confidence

Ripple Labs needed to do something to maintain investor confidence after its difficult week, and the creation of an XRP foundation accomplished that job. Response to Chris Larsen’s decision to donate his 7 billion XRP to the underbanked has been overwhelmingly positive, with many forum posters calling for Jed McCaleb to match Larsen’s donation. If both co-founders agreed to donate their XRP to the less-fortunate, they could greatly decentralize the XRP market without causing the price to plummet.

Ripple Is Moving On

This was exactly the news that investors needed to cement their current and future trust in Ripple Labs. Believing the issue now put to rest, Monica Long also stated that Ripple is no longer going to be publicly commenting on Jed McCaleb or Jesse Powell via the official Ripple forums. She reiterated that Ripple stands by the cease and desist letter sent to Powell but that the official forum is a place to discuss the future of Ripple Labs, not the past. Since the announcement, XRP’s market price has seen a small, but steady, uptick, indicating that investors are ready to move on as well.

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.