In 2012, Jed McCaleb, Arthur Britto, and Chris Larsen founded Ripple Labs. They launched the XRP Ledger (XRPL), whose native currency is XRP. All three developers received a share of 20 billion XRP each. In 2014, McCaleb left after a reported dispute with Ripple Lab’s co-founders. He took his entire XRP share with him. He later founded the decentralized network Stellar (XLM).
There would have been a market crash if McCaleb had offloaded his entire XRP shares at once. To avoid this, the three executives made a lock-up agreement. The plan was to loosen up the restrictions over time. On 30th June 2022, Cointelegraph released data showing that McCaleb had shed about 627.6 million XRP in 2022.
The Crypto Town Crier, a cryptocurrency news site, released a satirical article on July 15th. It stated that McCaleb will not sell his last five million XRP “in case it moons”.
On July 18th, at 6:31 am UTC, McCaleb transferred the last of his XRP shares. This transferal of 1.1 million XRP was approximately worth $394,742.18. A few hours later, the account showed an “ACCOUNT DELETE” transaction. This means that the account does not exist anymore on the ledger. The transaction represents the end of Jed McCaleb’s eight-year sell-off worth nine billion XRP.
Ripple’s legal battle
In late 2020, the United States Securities and Exchange Commission (SEC) sued Ripple stating that the company’s XRP tokens were sold as unregistered securities by its owners. In turn, Ripple cited Bill Hinman’s 2018 speech which asserted that Ethereum (ETH) did not represent “securities transactions.”
US Judge Sarah Netburn’s recent ruling highlighted SEC’s hypocrisy and stated that SEC has to produce documents related to Hinman’s speech. If Ripple is successful in making its stand, this will be a precedent for other similar crypto companies that issue tokens. It may also increase XRP prices.