Is the XRP coin a scam

Price manipulation? Ripple washes a billion XRP onto the market

Ripple has again unlocked a billion XRP worth $ 234 million. The process repeatedly gives rise to criticism of the company in dealing with XRP reserves and possible price manipulation.

FinTech Ripple has again activated one billion XRPs with a current value of almost 234 million US dollars from their escrow account. In addition, transactions worth 17 million US dollars in the OTC wallet were tracked. The events again raise the question of whether Ripple influences the price on the market through XRP sales and the activation of the reserves.

Ripple unlocks one billion XRP

Half of the entire XRP offering is in the hands of Ripple. This has repeatedly accused the company of indirectly manipulating the course by activating the XRP contingent.

As Whale Alert has observed, the company's OTC wallet has now twice unlocked 500,000,000 XRPs with a total value of $ 226 million on March 1st.

Since Ripple opens monthly XRP quotas, the procedure is not a novelty. Ripple still has to face the accusation of lack of transparency and indirect manipulation, since changes in the amount in circulation influence the XRP price on the market.

According to a report by investment firm Grayscale, "there is a risk that large and / or prolonged periodic sales could put the price of XRP under pressure." In direct comparison with the crypto-conspecifics, XRP is also a comparatively centralized cryptocurrency. As an indicator of centralization, Grayscale lists Ripple's central role in the network and the susceptibility of XRP to market manipulation, above all the bundling of digital assets in a small number of wallets.

In addition, there seems to have been movement in Ripple's OTC wallet again. The wallet, which is designed exclusively for over-the-counter institutional sales, was able to track a transaction of 75,202,210 XRP worth $ 17 million in wallets of unknown origin in February. The exact amount Ripple sold will be included in the upcoming Q1 2020 market report.

In an interview with the Financial Times Ripple CEO Brad Garlinghouse justified the XRP sales practice:

We would not be profitable or have no positive cash flow without the sale of XRP.

XRP sales plummeted

XRP sales plummeted in the fourth quarter of 2019. While Ripple was still able to sell XRP worth 169.42 million US dollars in the first quarter of 2019, the sales value climbed to 251.51 million US dollars a quarter later. After all, the TokenSale was still worth $ 66.24 million in Q3, just before XRP sales fell to a low of $ 13.08 million in Q4. For comparison: A year earlier, the value of XRP sold in Q4 2018 was $ 129.03 million.

Ripple justified the slump by suspending programmatic sales, i.e. XRP sales on crypto exchanges. The total amount of XRP sold in the fourth quarter of 2019 therefore consists of over-the-counter direct sales.

This is not the first time that Ripple's approach has come under criticism. By activating XRP reserves, Ripple is pushing the price on the market. Since the company is planning an IPO this year, according to Garlinghouse, FinTech should rethink its practice and create more transparency for future investors.