Ripple Labs co-founder Jed McCaleb has announced his intention to sell his sizable stake in the company’s native digital currency.
Known as ripples, or XRP, the currency was created as a unit of account and spam prevention tool within the Ripple Labs payment network.
In a post on XRP Talk forum, entitled ‘Selling my XRP’, McCaleb made his intentions known:
“I plan to start selling all of my remaining XRP beginning in two weeks. Because I have immense respect for the community members and want to be transparent, I’m publicly announcing this before I start.”
In contrast to the buoyant performance of bitcoin as of late, McCaleb’s announcement has caused XRP’s price to drop precipitously.
On the three largest gateways, or exchanges, for Ripple, the price has declined significantly – all at least by 40%.
McCaleb indicated in his post that he previously held nine billion XRP.
Although McCaleb says he has given a portion of his XRP to charity, his decision to send the sizeable remainder onto the open market is hitting the value of the cryptocurreny.
XRP has now dropped to #7 in the rankings for digital currency market capitalizations.
Ripple allows parties to transmit any form of value across its payment network for free. However, to convert it into something other than XRP requires the use of gateways that charge fees.
The number of ripples in circulation amounts to roughly 100bn XRP. At the inception of Ripple Labs, the company was given 80 billion XRP to manage by giving it to users and investors. The remaining 20 billion went to early founders of the company, including McCaleb.
Arthur Britto, another co-founder of Ripple Labs, posted a statement regarding McCaleb’s intentions, and said there is a plan to prevent such actions from the company founders in the future.
Jed McCaleb already has a lengthy history in the cryptocurrency community. He was the founder of Mt. Gox and sold the now-defunct bitcoin exchange to Mark Karpeles 2011.
McCaleb then founded OpenCoin, which was the precursor to Ripple Labs.
After key founders joined the project, including current CEO Chris Larsen, the company’s name was changed to Ripple. McCaleb, for a time, held the role of Chief Technical Officer at the company.
Since stepping down from that position, McCaleb has announced he has been working on a bitcoin-related startup operating in stealth mode.
McCaleb is also a venture partner at Pantera Capital, an investment firm that focuses on the bitcoin industry for its portfolio of holdings.
Pantera most notably invested in Bitstamp, currently the world’s largest exchange by BTC volume.
Image via Ripple