Ripple Labs strikes deal with co-founder Jed McCaleb to prevent massive selloff of XRP

Home » Ripple Labs strikes deal with co-founder Jed McCaleb to prevent massive selloff of XRP
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In May, Ripple Labs co-founder Jed McCaleb announced that he was planning to sell off his holdings of XRP after a seemingly acrimonious split from the company. As one of the founders of the Ripple project, McCaleb owns 9 billion XRP, or nearly 9% of the total supply of Ripple’s currency tokens. The announcement sent XRP’s price into a nosedive, a situation not helped by the announcement that McCaleb is part of a team launching a Ripple rival called Stellar.

Intentionally crashing the price of XRP, particularly in the process of launching a competing payment system, could easily become lawsuit fodder for Ripple Labs. As a result, both parties have been quietly negotiating a exit plan, allowing McCaleb to sell off his holdings and Ripple Labs to keep the price of XRP relatively stable. Writing on the Ripple Labs forum, Director of Communications Monica Long announced yesterday that both parties had signed a settlement agreement.

Following Jed’s stated intention to sell his XRP, Ripple Labs reengaged Jed to ensure responsible distribution of his XRP stake in a way that helps grow the Ripple ecosystem. After extensive discussions, Jed has agreed to lock-up terms for his XRP. By the terms, he cannot sell more than:

$10,000 per week during the first year
$20,000 per week during the second, third and fourth years
750 million XRP per year for the fifth and sixth years
1 billion XRP per year for the seventh year
2 billion XRP per year after the seventh year

For context, $10,000 per week currently comprises less than one percent of volume, so it’d have a minimal impact to the price of XRP. For the next four weeks, he retains an option to sell up to $2.5 million of XRP off market to a single counterparty vetted by Ripple Labs.”

Long’s post also confirmed that McCaleb’s split originated from two “very different viewpoints” on how Ripple would ultimately be developed, adding further fuel to the rumor that his exit from the Ripple Labs was less than friendly. Both Ripple and Stellar are blockchain-based, currency agnostic systems that may become major forces in facilitating fiat and bitcoin transactions in the financial system, as well as having significant potential for use in smart contracts and similar services.

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