XRP coins are highly centralized between the founders.
The founders hold most of the coins, and they sell to each other, manipulating the price upwards.
It already happened before.
It's happening again now, a Ripple co-founder just dumped billions of XRP.
Ripple Co-Founder’s Token Selloff AcceleratesCrypto entrepreneur Jed McCaleb, now with a rival startup, has sharply stepped up sales of his billions of dollars in XRP holdingsOne of the co-founders of crypto startup Ripple holds billions of dollars worth of the company’s digital token, but his continuing sales of the token have dramatically risen over the past few weeks.
Jed McCaleb, who left Ripple a few years ago and is now co-founder of a competing outfit called Stellar, could put pressure on the cryptocurrency by increasing sales of the tokens, called XRP.
XRP, which was created by Ripple, is worth more than $22 billion, making it the cryptocurrency market’s third-most valuable token after bitcoin and ether. In the frenzy of the crypto market that crested early this year, XRP climbed as high as $118 billion. But since the start of the year, the crypto market has plunged about 74%.
Mr. McCaleb’s increased sales of XRP could be another factor that drags on the token, which Ripple has used to fund its growth and is intended to help run its payments-protocol software.
A founder’s increasing sale of XRP could be a negative for the token’s value, just as it would be if a CEO of a publicly traded company suddenly started dumping shares in the company’s stock.
Mr. McCaleb’s selloff also highlights the complications that early-stage crypto startups can face when their fortunes depend so much on the value of a publicly traded token.
A representative for San Francisco-based Ripple declined to comment. Mr. McCaleb wrote in an email, “I’m not selling more than I have agreed to with Ripple,” but he declined to comment further.
Mr. McCaleb, who also started early crypto exchange Mt. Gox, left Ripple in 2013 amid a falling-out and went on to start Stellar in 2014.
Ripple, which was founded in 2012 and later renamed Ripple Labs Inc., specializes in global cross-border money transfer technology. Not counting the roughly 60 billion XRP tokens ($23.6 billion) held by Ripple as of January, the company previously raised about $93 million in venture capital from firms like RRE Ventures, Andreessen Horowitz and Founders Fund, according to PitchBook Data.
Ripple has been buoyed by the dramatic rise of the price of XRP tokens over the past year or so. The company holds the majority of XRP and has publicly talked about funding Ripple with proceeds of token sales.
It has also capitalized on the high value of XRP to fund various projects including a venture fund called Xpring. Ripple’s founders have even used XRP to invest in directly startups such as Omni.
Under an agreement he reached with Ripple in 2014, Mr. McCaleb’s sales of XRP have been limited to a daily cap, which was revised in 2016 based on a set percentage of the average daily volume of XRP. This was done to facilitate an orderly market for Ripple.
Mr. McCaleb and his children retained about 5.3 billion XRP when the agreement was signed, not including 2 billion XRP in a donor-advised fund. In 2016 McCaleb and the fund held 7.3% of XRP, a fortune that would be worth around $4 billion, though he has sold a portion since then.
Mr. McCaleb, now in the third year of the agreement, previously was selling at or below the 0.75% cap, according to the XRP ledger and his publicly-known XRP address. However, starting in late August, his sales dramatically rose by the day.
In July, Mr. McCaleb was selling 20,000 to 40,000 XRP a day. However, starting in August, according to a public clearinghouse of token trades, he started selling 499,312 XRP a day, and at one point sold 752,076 a day. In other words, each day he moved and sold about 35 times the limit outlined in his 2016 agreement with Ripple. For example, over six days ending Wednesday, Mr. McCaleb sold more than 500,000 XRP a day, or about $150,000.
The average daily trading volume of XRP on the Ripple consensus ledger—which is how Mr. McCaleb’s cap is calculated—hasn’t changed considerably in recent months and not enough to account for the change in his daily sales.
Mr. McCaleb can’t make these changes without Ripple’s approval, according to the 2016 agreement. His XRP was placed in a custodial account at Ripple, according to the agreement. It says that although he owns the XRP, Ripple controls the releases of the tokens to him.
https://www.wsj.com/articles/ripple-co-founders-token-selloff-accelerates-1537788600?mod=e2tw 
