Cryptocurrency live tracker Whale Alert recently tweeted that Ripple transferred millions of tokens out of escrow on Dec. 2 and returned it after several minutes. Move raises fears company is dumping XRP to crash prices.
Ripple was reported to have transferred one billion XRP from its escrow wallet in two distinct transactions. As of press time, the tokens were worth about $219 million. But what caught the crypto community’s interest was that the company transferred the same amount back into the wallet after seven minutes. However, it was done in three different transactions.
55 Billion XRP Secured
Ripple moving its tokens out of escrow only to return it after a few minutes might look like a mistake, but it’s apparently something that the company has been doing monthly. The set-up was initiated in 2017 when Ripple secured 55 billion XRP into various accounts. Each account reportedly contained a billion XRP.
One billion XRP is then unlocked every month. These tokens were then sold to crypto exchanges and other institutions. XRP that were unsold were then returned to escrow after 30 days. The practice was reportedly developed to reassure Ripple’s investors that the company will never offload all its holdings into the open market simultaneously.
However, this practice has raised questions as to whether Ripple is deliberately dumping the tokens to crash its price. It has even led to one user to start the “Stop Ripple Dumping” petition on Change.org back in August. It was followed by another petition in September. This was more tongue-in-cheek and urged the company to dump more XRP to “unleash the utility.”
XRP users have even threatened the company’s management of a takeover if they don’t take action against the allegations of currency dumping. Ripple rebutted that it is selling the tokens to invest in companies that could help grow their ecosystem and to have funding for its operations.
The price of XRP has been dropping steadily over the last few months and some sectors are pointing at the token sales as the culprit that’s preventing the world’s third-largest crypto from rising.
The San Francisco-based company has established several partnerships recently in the hopes of boosting its prices. Its latest collaboration is a two-year strategic partnership with MoneyGram. The deal entails the money transmission firm drawing up to $50 million in exchange for equity. The two companies would then work together on foreign exchange settlement and cross-border payments with digital assets.
Ripple recently paid the final $20 million of its MoneyGram investment, but it seems the company wasn’t able to cash in the deal as the coin is still trading low.