Ripple Comes Under Fire For Price Manipulation, David Schwartz Responds

February 22, 2024 2:16 pm Comments

Ripple Labs has come under fire for its choice to use trading bots in its programmatic sales.

Court documents revealed the usage of the GSR trading bots by Ripple, and the XRP Army was not happy with the newly revealed information.

In an online thread pointed at the Ripple leadership, Many alleged price suppression of Ripple’s native currency, XRP.

Ripple’s Chief Technical Officer David Schwartz then responded to the allegations and explained that Ripple Labs chose to tap the GSR trading bots to avoid any direct impact on the market price.

He explained that this was done to stay above board and avoid any compliance issues. Take a look at what he had to say in this lengthy social media thread:

The Crypto Basic provided some background information on the incident that triggered the fierce debate:

In his YouTube video, Zach Rector called attention to the fact that following this email exchange, which occurred on Dec. 18, 2017, XRP witnessed a price explosion.

Data from the charts confirm that the crypto token rallied 417% from a low of $0.64 on Dec. 18, 2017 to its ATH of $3.31 on Jan. 4, 2018.

This incident triggered questions on whether Ripple’s programmatic sales at the time were responsible for the suppression of XRP’s price.

The Ripple Labs Chief Technical Officer further explained: “Programmatic sales are sales that take place on exchanges, generally by market making with a slight net bias towards reducing the amount you hold.

Effectively, you sell an asset by helping other people both buy and sell that asset, but on net, you sell more than you buy.

Sales in connection with ODL occur when someone wants to make a payment somewhere using Ripple payments.

For example, say someone wants to send Mexican pesos.

One way they can do this is by buying XRP from Ripple at the moment they need to make the payment, send the XRP to a Mexican exchange, exchange XRP for MXN, and then use a payment provider to make a Mexican domestic payment to the recipient.

If Ripple buys back fewer XRP than sold in that payment, then that is a net sale in connection with ODL.”

Cryptopolitan concluded:

Despite Schwartz’s efforts to offer clarifications, members of the XRP community remain unconvinced.

The debate persists, with continued scrutiny of Ripple’s broader endeavors to bolster XRP’s price.

The community’s skepticism highlights the need for transparency and accountability in Ripple’s sales practices.

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