Ripple Co-Founder Jeb McCaleb Accelerates Sell-Off

ripple_selloff
Ripple is suffering a serious sell-off after last week’s bull run.

Ripple (XRP) had an explosive week last week spurred by the hype around the release of xRapid. However, those gains have since stalled and have now begun to drop off rapidly. As reported by the Wall Street Journal, this drop off coincides with another interesting factoid that may be linked to the price collapse: Ripple’s Co-Founder Jeb McCaleb has been selling XRP at an accelerating rate.

McCaleb is one of the co-founders of Ripple but years ago has left the project to work on Stellar, a rival project to the Ripple vision. Although he has signed an agreement with Ripple on how often he can sell his coins, this has been largely dependent on a total percentage of trading volume. However, during times of high volume as has been the case for the past two weeks, McCaleb’s wallet can be seen to be increasing its sell pressure on the entire market.

Why does this matter? Frankly, it puts a damper on Ripple’s long-term growth. There’s little question that a sell-off from a co-founder is a negative catalyst similar to how if a publicly-listed firm’s CEO began dumping his or her shares onto the market. As per the 2016 agreement, McCaleb at least has some 7.3% of the entire circulating supple which is about 5.3 billion tokens. This does not include another 2 billion XRP tokens which comes from his donor-advised fund. In all, his fortune amounts to something around $4 billion even though he has sold a portion of it in the past year.

XRP, a cryptocurrency created by Ripple, has a market capitalization of around $18 billion and has held onto the #3 rank for all cryptocurrencies for some time. The Wall Street Journal has said that “McCaleb’s increased sales of XRP could be another factor that drags on the token, which Ripple has used to fund its growth and is intended to help run its payments-protocol software.” In other words, the strategy Ripple has been using to fund its fintech endeavors could now be coming back to haunt them.

Ripple has declined to comment. When McCaleb was asked about it, he simply replied “I’m not selling more than I have agreed to with Ripple.”

However, his words upon investigation do not match with reality. According to a public clearinghouse of token trades, since August his sell-off has accelerated. During this time he started selling 499,312 XRP a day, at some points double this amount. According to his 2016 agreement, this would mean that McCaleb was selling some 35-times the amount that was agreed upon. This would amount to some $150,000 and more every day of sell pressure.

McCaleb has had an interesting career within the cryptocurrency space to say the least. He started the infamous Mt. Gox exchange in 2013 and then went on to co-found Ripple. However, he left Ripple in 2014 and formed an adversarial cryptocurrency called Stellar Lumens. Now, he seems to be using his former co-founder status at Ripple to capitalize on this short-term price increase and wants to see its continued decline.

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