Nobody Buys XRP to Give Ripple Money: David Schwartz

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Sun, 12/29/2019 - 11:39
Alex Dovbnya
Ripple CTO David Schwartz insists that his company never ran an ICO, contrary to what critics have to say
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There is an ongoing Twitter debate about whether or not Ripple ran an initial coin offering (ICO) by selling XRP tokens, which was started by former Bitcoin Core developer Peter Todd. 

According to Ripple CTO David Schwartz, the blockchain titan doesn't get money from those who buy XRP tokens. Instead, it gets funded by venture capitalists and angel investors.  

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Ripple doesn't need your money 

Schwartz explains that people buy ICO tokens to invest in the company that issues them. Ripple, on the other hand, would be able to continue the development of its tech without XRP with the help of its VC funding. XRP wasn't used as a fundraising mechanism to get the network up and running.   

As reported by U.Today, Ripple has surpassed $10 bln in valuation after securing $200 mln during its Series C funding round. It's now the second most valuable company in crypto after mining juggernaut Bitmain.    

Related
Ripple Once Again Tries to Toss Class-Action Lawsuit, Insists XRP Is Not a Security

What's the point of XRP? 

Ripple, which controls 55 percent of all XRP tokens, unlocks 1 bln of them from its escrow wallet on a monthly basis. Even though the company adopted "a more conservative approach" to XRP sales in the latest quarter, it is not immediately clear what it is doing with more than $1.2 bln it has sold since Q4 2016. 

Brad Garlinghouse, the CEO of Ripple, argued that these sales were necessary to grow RippleNet and XRP-related businesses. In late November, Ripple finalized its $50 mln investment in MoneyGram, thus securing a 9.95 percent stake in the company.  

However, like other critics, Todd says that XRP doesn't give investors a real right to anything. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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