McCaleb started working on Ripple in 2011 and was part of its founding team. The company launched in 2013. When he left the project in 2014 to work on Stellar (XLM), he received 8 billion XRP tokens for his contributions to OpenCoin. This asset is known today as XRP.
The entrepreneur received the tranche according to a set schedule. He has made it clear through XRP Talk, a forum for XRP investors and supporters, that he plans to sell the funds he received. He has already donated a sizable portion to charitable organizations.
Since then, he has been periodically selling XRP. Data shows that he recently sold more than 135 million tokens, worth nearly $58 million. It is worth remembering that McCaleb is "burdened" by certain contractual restrictions. He can only liquidate his capital in XRP at a certain value.
Basic technical information about XRP
Ripple is one of the most technologically advanced blockchain projects, providing superior scalability, but achieved at the expense of centralization and the need for network gateway intermediaries. XRP can perform more than 1,500 transactions per second (TPS), while accepting up to 50,000 transactions under extreme load, giving it similar scalability to Visa's payment network. Ripple ultimately aims to act as a real-time settlement network, so operations are confirmed in up to five seconds.
Currently, there are almost 45 billion XRP units in market circulation, more than 53 billion are placed on Escrow contract, while about 7 billion belong to Ripple Labs.
It is worth remembering that the Ripple network can function without XRP, which is provided by the xCurrent software, which is a communication network supporting various fiat currencies.
The controversy
McCaleb's big XRP sell-off came as the cryptocurrency's price soared after a massive sell-off over the U.S. Securities and Exchange Commission's (SEC) lawsuit against Ripple Labs. The SEC claims that Ripple "raised more than $1.3 billion in an unregistered, continuous offering of digital asset securities."
The SEC alleges that Ripple Labs sold unregistered securities in the form of XRP for years. Ripple responds that XRP cannot be regulated due to its use case as a means to transfer value.
Another Lawsuit
Ripple faced more lawsuits. It was filed by an individual who claims that he made a relatively small investment of $100 in XRP last year, losing 50% of the amount invested in the following weeks. Investor Tyler Toomey said he bought 135 XRP last November when prices were rising. Then, in December, he sold the tokens and scored a $48.5 loss on his initial capital.
Seemingly nothing, yet Toomey went to court with the case. In a class-action lawsuit, he claimed - on behalf of himself and other like-minded investors - that Ripple illegally sold millions of dollars worth of its XRP tokens to other Florida residents. He added that the company's founders profited illegally from the sales:
"Defendants [Ripple] sold millions of dollars (or more) worth of XRP tokens, which are securities under Florida law, to Florida investors without registering them with either the federal government's jurisdiction or Florida itself," - reads the lawsuit, with the additional claim that Ripple was alleged to have made more than $1.36 billion.
Price
The price of XRP reached a high above $0.7 last year before falling sharply due to a lawsuit. The price fell to a low of $0.2 before recovering. Now, the price of the asset is trading at $0.447.
While most cryptocurrency exchanges have withdrawn XRP in response to the lawsuit (For Example Coinbase), others have sided with Ripple, arguing that the SEC's move has hurt XRP investors.
Cryptocurrency exchange Uphold noted that the SEC's goal is to protect consumers. The platform believes that it is difficult to imagine how the SEC would accomplish this goal. An adverse ruling would make Ripple a worthless project, which would translate into billions in losses for investors.
