FBI Investigated Extortion Attempt Over Allegedly Negative Ripple Videos

Ripple was threatened three years ago when the prices of XRP and bitcoin shot to historic highs.

AccessTimeIconOct 23, 2020 at 7:24 p.m. UTC
Updated Sep 14, 2021 at 10:23 a.m. UTC

Ripple Labs, the digital asset payment service provider tied to XRP, one of the five largest cryptocurrencies, was blackmailed at the height of crypto mania three years ago, CoinDesk has learned.

Documents obtained by CoinDesk through a Freedom of Information Act request show an unidentified individual emailed Ripple on Oct. 19, 2017, demanding 5 million XRP – then worth $1.1 million – in exchange for withholding videos it claimed portrayed the company in a negative light.

The Federal Bureau of Investigation’s (FBI) San Francisco and Canberra, Australia, offices investigated the extortion attempt from Oct. 23, 2017, to April 20, 2018, according to the documents, which do not describe the content in the videos or whether Ripple paid the 5 million XRP.

The case was closed after there was trouble tracking the extortionist down with just an email address, Internet service provider information and an IP address, a computer or a smartphone’s online fingerprint, the documents say.

Asked about the videos and payment request by CoinDesk, Ripple did not respond by press time and the FBI declined to comment.

The privately held company, co-founded in 2012 by Chris Larsen and Jed McCaleb, the competing Stellar virtual currency’s founder, is eyeing an initial public offering and was the subject of intense market speculation two years ago when the prices of XRP and bitcoin (BTC) shot up in tandem to historic highs.

The market frenzy put targets on the backs of high-profile cryptocurrency companies in 2018, a record-breaking year for exchange hacks and other crimes victimizing them.

Ripple is funded by Andreesen Horowitz, Google Ventures, Lightspeed Venture Partners, Pantera Capital, Accenture, CME Group and IDG Capital plus banks that have layered apps on top of its payment protocol including Santander, SBI Holdings and Standard Chartered.

Correction (Oct. 23, 20:30 UTC): Changes name of Ripple co-founder to Chris Larsen


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