Wow, these past couple of days have been wild for crypto, bitcoin smashing all time highs like a champ, LBRY credits getting a new floor for its stable price, and XRP being sued by the SEC.
Like I said, a lot to process around here.
One of the best summaries of the situation regarding XRP was shared by jason calacanis on twitter, and I just wanted to share his analysis and give my commentary at the end, you can consult the source here.
[Jason's tweet storm begins]
Sounds like jail time: "Ripple created an information vacuum such that Ripple and the two insiders with the most control over it Chris Larsen & Brad Garlinghouse sell XRP into a market that possessed only the information Defendants chose to share about Ripple and XRP"
Smoking guns: "Ripple received legal advice as early as 2012 that under certain circumstances XRP could be considered an “investment contract” and therefore a security under the federal securities laws." [ note: we all were saying this on twitter!]
What we all (thought) is confirmed: "Ripple used this money to fund its operations without disclosing how it was doing so, or the full extent of its payments to others to assist in its efforts to develop a “use” for XRP and maintain XRP secondary trading markets."
TRANSLATION: Ripple was a giant ponzi scheme. They sold imaginary money to retail investors--AGAINST LEGAL ADVICE--and then used that money to pay off (bribe?) partners to build a business to cover up the illegal stock sales.
INSIDER TRADING: "Defendants continue to hold substantial amounts of XRP &—with no registration statement in effect—can continue to monetize their XRP while using the information asymmetry they created in the market for their own gain, creating substantial risk to investors."
Chris Larsen knew better but secured the bag: "Despite this knowledge & Larsen’s familiarity with Section 5 from SEC enforcement action that his previous company had settled in 2008 ... ripple & Larsen failed to heed some of the legal advice and warnings in the Legal Memos"
More smoking guns from the business plan: "Ripple’s stated business plan made Ripple’s conduct alleged here a foregone conclusion—Ripple made it part of its “strategy” to sell XRP to as many speculative investors as possible"
Shell game: "in 2016, Ripple began selling... xCurrent & xVia, from which it has earned approximately $23m through 2019, though neither uses XRP or blockchain technology." [ read: they suckered retail investors to build a technology that didn't use XRP--like folks here said! ]
Chris Larsen & Brad Garlinghouse were dumping while suckers were buying: "Larsen and his wife netted at least $450 million USD from those sales." "Garlinghouse sold over 321 million XRP... generating approximately $150 million"
Ripple gave illegal market makers discounted xrp (anyone have names/guesses?) to apparently pump up the ponzi scheme: "Ripple made many of the XRP Institutional Sales at a discount from XRP market prices."
Did Ripple paid off marketplaces? Read this: "Another such distribution included a November 8, 2018 agreement wherein Ripple agreed to pay a company up to $17.5m in XRP if the company met certain “milestones” relating to the “integration” of XRP into the company’s systems"
Yep! Seem so (is this coinbase?): "Ripple tried repeatedly & unsuccessfully to persuade that digital asset trading firm to “list XRP on [its] exchange” by offering to “cover implementation costs, paying rebates, [and] brokering intros to large XRP holders for custody.”
Didn't work so they offered $1m in cash--is this a bribe?!: "Undaunted by these initial failures, Ripple Agent-3 emailed the two owners of the firm directly in July 2017, copying Garlinghouse, and asked: “Does a $1M cash payment move the needle for a Q3 listing?”
Statregized manipulating volume: "“The thesis is to show a period of consistent buying from an account that is known to be a consistent seller.
SMOKING GUN #1,495: " The intended impact of the buying is not to move the price but rather to provide confidence in the market, which in turn will move the price.”"
Brad Garlinghouse greenlights manipulation? "On Sep 23, the VP of Finance, after consulting w/Garlinghouse & Larsen & obtaining Garlinghouse’s “go ahead,” directed Market Maker to “keep the buying light [the day after the announcement] & then do the bigger slug starting Sunday”
When xrp didn't keep up w/$bitcoin Brad Garlinghouse approved a buyback!!
"Ripple employees prepared & delivered an internal presentation for Garlinghouse & Larsen... “XRP began underperforming [Bitcoin]” since early May 2020, partly because of Ripple’s sales of XRP"
This buyback was obviously intended to keep the ponzi scheme up: "The employees proposed “supply limiting tactics,” such as Ripple’s buying back XRP." "Garlinghouse approved the “buy back” option"
THEY PUMPED AND DUMPED... AND PUMPED AGAIN!!!!
[end of Jason's tweet storm]
So, essentially xrp lied, cheated and applied the "fake it till you make it" system to a Theranos level.
I don't know about you, but I think there is a high likelihood that xrp gets delisted from many exchanges, in fact, at least one exchange already did it, although is not a notable one.
Good thing that I do not hold any XRP, I only use it whenever I need fast transfers, but I always loathed the horrible management of the XRP tokens that the Ripple company had.
What are your thoughts, do you think this is the end of XRP? let me know in the comments down below.
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