Bitcoin’s strong 200% performance in 2019 may have many thinking that all cryptocurrencies, especially large-cap digital assets, are performing well. But, this isn’t the case for XRP and its estranged cousin, Stellar Lumens (XLM). Year to date, XRP is down some 20%, as it XLM.
This dramatic underperformance, which comes as global markets have become chaotic and tumultuous, has been primarily attributed to two things: 1) the liquidation of XRP reserves by Ripple Labs and 2) ongoing litigation against the project.
But, Brad Garlinghouse, the chief executive of the San Francisco-based fintech firm, has had about enough. The Ripple C-suite member recently came out to bash his firm’s critics, which he dubbed “questionable sources spreading FUD”, in an impassioned Twitter thread, which has become something like a beacon of hope for XRP’s remaining bulls.
I’m always struck by the questionable sources (i’m being generous here) spreading FUD about #XRP and @Ripple. Even more so over the last few weeks (Ripple’s XRP sales, litigation etc)…. thus, I feel compelled to comment
— Brad Garlinghouse (@bgarlinghouse) August 27, 2019
Clearing The Air About XRP
For years now, a debate has raged about how financial regulators should address XRP. Some say its a digital security; others say it’s nothing more than a utility token that is not much different than Bitcoin or Ethereum.
But, a lawsuit filed against Ripple argues that XRP, which the firm has been trying to claim is not “its token”, should be classified as an unregistered security. A class, which is led by XRP investor Ryan Coffey, have claimed in their case that XRP has “all the traditional hallmarks of a security.” An update to the lawsuit argues that Ripple is responsible for breaking a number of Californian laws.
While Garlinghouse isn’t necessarily in the right position to directly comment on the case, he asserted that XRP should not be defined as a security. Garlinghouse cited comments from the United Kingdom’s Financial Conduct Authority and “others” on the cryptocurrency to back his point.:
“I will say: SEC guidance isn’t issued by the Commission and isn’t law, rule or regulation. It’s clear XRP is not a security and the UK and others have said as much.”
Garlinghouse also issued a response to a scathing article from Bloomberg about the sale of XRP tokens by Ripple. In that article, the outlet cited countless cryptocurrency industry executives and investors, most of which expressed skepticism towards Ripple’s decision to dump hundreds of millions of dollars worth of XRP on the open market.
In his response tweet, the CEO wrote that these sales help expand the utility of XRP, not just the size of Ripple’s coffers. Garlinghouse added:
“[This helps us] build RippleNet & support other biz building w/XRP ie Dharma & Forte. Reality is we DECREASED our sales by volume Q/Q and since then the inflation rate of XRP circulating supply has been lower than that of BTC and ETH.”
Garlinghouse’s comment is timely, with many on Twitter starting to lambast the startup for what some have dubbed an attempt at an “exit scam”.
Ripple Continues to Make Strides
It is important to note that Ripple, throughout all this drama, hasn’t stagnated as a firm.
In June, the firm agreed to invest some $50 million into MoneyGram, one of the world’s largest international money-transfer firms. The partnership sees MoneyGram utilize xRapid, “a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency. It leverages XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies.”
Also, in an interview with Yahoo Finance, Garlinghouse pledged that he would use large Ripple’s balance sheet to push for more investments and acquisitions that will satisfy their clients, thus improving the utility of XRP.