Co-Founder of Ripple and Stellar Violates the Agreement Established with Ripple

5 min read

The Wall Street Journal (WSJ) announced on Monday that Jed McCaleb, co-founder of Ripple and Stellar, has decided to ‘step up’ the sales of his billion dollar XRP tokens.

Jed McCaleb, a crypto personality that got involved in the foundation of the two cryptocurrency-based projects Ripple and Stellar, has recently boosted sales of the XRP tokens he owns. At the time when Jed McCaleb left Ripple in 2013, the co-founder registered roughly 9 billion XRP tokens plus shares in Ripple.

On 21 May 2014, McCaleb reported that he had invested some of his tokens to support various charitable causes and that he would soon sell his remaining funds. As reported by Finextra, the co-founder’s announcement led to a decrease of Ripple’s XRP in value by 65% the following day. The crypto community assumed that he was looking forward to ending as soon as possible any connection with Ripple.

On 14 August 2014, Ripple announced that according to “Jed’s stated intention to sell his XRP, Ripple Labs reengaged Jed to ensure responsible distribution of his XRP stake in a way that helps grow the Ripple ecosystem” as well as that the co-founder had agreed “to lock-up terms for his XRP.”

At that time, Jed McCaleb was limited to his sales as follows:

  • “$10,000 per week during the first year;
  • $20,000 per week during the second, third and fourth years;
  • 750 million XRP per year for the fifth and sixth years;
  • 1 billion XRP per year for the seventh year;
  • 2 billion XRP per year after the seventh year.”

Even so, in April 2015, Ripple claimed that Jed and his family members did not respect the obligations imposed by the agreement. The two have clarified the situation only in February 2016 via the “Final Settlement with Jed“.
Here were the criteria of the 2016’s agreement:

“Ripple will release any claim it has on the funds currently deposited with the federal District Court for the Northern District of California and Stellar will take possession of these funds. Jed will donate 2 billion XRP to a charitable donor-advised fund (“DAF”) of his choice. The same limits are placed on the ability of the charity to sell the XRP as are placed on the Jed’s ability to sell his remaining XRP.”

“All of Jed and his children’s remaining XRP, approximately 5.3 billion XRP, will be placed in a custody account at Ripple. While Jed retains full title and ownership of his remaining XRP, Ripple will control the release of his XRP in a manner consistent with the settlement agreement.”

“Specifically, Jed will be allowed to sell his remaining XRP in the following manner: – for the first year of the agreement Jed and the DAF will be able to collectively sell 0.5 percent of the Average Daily Volume of XRP for each day of the week, including weekends and holidays.* – for the second and third years of this agreement, Jed and the DAF will be able to collectively sell for each day of the week 0.75 percent of the Average Daily Volume. – for the fourth year of the agreement, Jed and the DAF will be able to collectively sell for each day of the week 1.0 percent of the Average Daily Volume. for any time after the fourth year of the agreement, for each day of the week Jed and the DAF will be able to sell 1.5 percent of the Average Daily Volume.”

One day after the new agreement came into force, Jed commented about it via a blog post:

“I fully complied with the previous agreement but now I have better terms for the amount of XRP I’m able to sell. The new rate is a percent of daily volume. This results in a higher limit given recent trading volume and allows for significant increases in my selling ability as volume increases, something that was not possible before with the prior agreement’s flat dollar limit. To effectuate this, I have escrowed my XRP. I can finally donate 2B of my XRP to charitable causes, something I was unable to do under the prior agreement. This allows me to continue to fund more charities like Give Directly and MIRI which has been something I was actively doing prior to the previous agreement. As part of this settlement, I finally sold the rest of my Ripple equity. Ripple was required to find a buyer for me at a great price.”

https://twitter.com/KyleSamani/status/1044355792973905921

At the time of writing, Ripple’s XRP is traded at $0.448727 and has a market capitalization of $17,891,162,777 (according to CoinMarketCap).
Elite CurrenSea


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