As the fresh criticisms on Ripple’s XRP make their rounds, David Schwartz, the chief technology officer (CTO) of the company, came out to defend the project.
Per Schwartz, XRP is not a funding technique for the company as it sold the token for “negligible amount” when a market price for the token was established.
Nobody buys XRP to give Ripple money to do things. We were vc/angel funded and were going to build regardless. We started selling XRP only after there was a market price and for negligible amounts compared to our other funding.
— David Schwartz (@JoelKatz) December 29, 2019
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XRP was always on the radar of critics from both within and outside the industry. Ex-Bitcoin Core developer Peter Todd also joined the debate, alleging that the primary purpose of XRP is to “make Ripple money.” He also compared the coin to other failed tokens pumped into the market via initial coin offerings (ICOs).
Raising money via XRP sales?
The project faced criticism after it announced the closure of a $200 million funding round in which Tetragon Financial Group Limited took part.
The Block’s Larry Cermak pointed out that the company raised the proceeds from the venture capital while it sold $260 million worth XRP in the last four months. So far, the company sold $1.2 billion in XRP.
The CTO also emphasized that the San Francisco-headquartered company relies on venture capital funds to raise money for its operations when it is not generating any profits.
According to Crunchbase, the blockchain-based payments company raised over $293 million from investors in several funding rounds. Apart from the latest round, it raised $55 million from SBI Investments in 2016 and $28 Million from IDG Capital a year earlier.
XRP is currently the third-largest digital currency in the market, with over $8.5 billion in market cap. However, there is a stark difference in this number from the market leader Bitcoin. With the boom in the market in early 2018, the value of XRP touched its peak. However, since then, it shed 95 percent of its value and is now trading at $0.19 apiece, per Coinmarketcap.com.