A Fox Business reporter is questioning Ripple and its CEO, Brad Garlinghouse, about a major discrepancy: Garlinghouse is reportedly worth around $10 billion, yet Ripple’s financial information is largely unavailable to the public.
Garlinghouse’s Wealth vs. Ripple’s Transparency
Charles Gasparino points out the irony of Garlinghouse’s massive net worth, potentially placing him among the wealthiest Americans, while Ripple, a seemingly traditional business, avoids public financial disclosures. He argues that this lack of transparency is unusual for a company of Ripple’s size and scope.
The SEC Confirmation Hearing: A Potential Turning Point
Gasparino highlights the upcoming confirmation hearing for Paul Atkins, Trump’s nominee to lead the SEC. He suggests that Senator Elizabeth Warren, known for her skepticism towards cryptocurrencies, might grill Atkins on Ripple’s lack of financial transparency. The SEC’s recent decision to drop its appeal in the Ripple case, focusing on XRP sold on public exchanges, doesn’t resolve the larger question of Ripple’s financial disclosures. The argument is that while XRP sales on public exchanges might not be securities, the token’s use in building the Ripple platform does trigger standard financial disclosure requirements.
Ripple’s Response and Legal Standing
Ripple hasn’t responded publicly to Gasparino’s claims. While they release quarterly reports on XRP holdings and escrow accounts, they don’t publish full financial statements like publicly traded companies. As a private company, they aren’t legally required to do so.
Garlinghouse’s XRP Sales and Ripple’s Early Days
Court documents from the SEC lawsuit against Ripple revealed Garlinghouse’s significant XRP sales between 2017 and 2020, totaling around $164 million. Most of these sales were made on foreign exchanges. The initial founders also received a large allocation of XRP at the token’s creation, further fueling questions about profit distribution. In 2017, Ripple locked 55 billion XRP in escrow to manage token supply.
The Bottom Line
The situation highlights the tension between the booming cryptocurrency market and traditional financial regulations. With Garlinghouse’s substantial wealth potentially tied to XRP’s success, the pressure is on Ripple to address the concerns around its financial transparency, especially given the upcoming SEC confirmation hearing.
