Is Ripple A Scam? Forbes Article
Today we have some controversial and interesting news when it comes to Ripple and whether it's a legit organization or whether it's a scam. Jason Bloomberg, a contributing author in Forbes, has raised a lot of questions when it comes to Ripple and XRP, the second most popular cryptocurrency token by market capitalization.
In his Forbes article titled, Is Ripple A Scam? He calls the core Ripple Business model a pump and dump scheme as it undergoes numerous activities to increase the value of the XRP token.
To show you how this works, Bloomberg also uses a flow chart, stating that unlike most cryptocurrency pump and dump schemes Ripple takes many steps to obscure this fact. He even used an analogy, to say that the starting point in the chart above is the issuance of many billions of XRP token - which is essentially like printing out Monopoly money out of thin air.
He goes onto say that, the people responsible for the Pump and Dump schemes, the Ripple Founders', were the ones that had issued the tokens, masking the truth with an open source community.
The author then raises the question, how did Ripple then end up with its massive stake in XRP, amounting to well over half the available tokens? Ryan Zagone, the director of regulatory relations for Ripple noted that "What we do have is we do own a significant amount of XRP, it was gifted to us by some of the open-source developers that created it. But there's not a direct connection between Ripple and the company XRP."
Furthermore, while Ripple is proud to say they have many customers, Jason Bloomberg noted that is we look more closely, most of the companies they list are partners and not customer - and they also pay these companies to become their partners. Bloomberg noted that Ripple is, therefore, using its shares of its free XRP tokens, which pay these companies to be their partners, to build the illusion that it has paying customers when Ripple is really just paying them.
Not only did Bloomberg then attack the Ripple Technology and question whether the token is a security or not, he goes onto to say that Ripple doesn't even need to be the digital asset used in cross-border payments and instant settlements and that, if they have another token with higher liquidity, faster speed, and no transaction fee, it can replace XRP in its purpose.
Now, these are some pretty confronting points, especially if you've been a big fan of Ripple. With over 30,000 views racked up on this article, it's not surprising to see someone post this on the cryptocurrency Reddit forum to ask other cryptocurrency enthusiasts to weigh in on their responses.
Redditor CL20, a cryptocurrency enthusiast that actually downloaded all transactions from the XRP and examined the payments. While Jason Bloomberg did raise some correct points such as the fact that Ripple owns more than half of all XRP, which makes wealth centralized, that XRP doesn't have to be the digital asset used in cross-border payments and instant settlements, there were many things that were wrong.
The things that were wrong in the article included the fact that, Ripple can Freeze your transactions or funds, the company is dumping XRP on exchanges, and that Ripple sold over $500 million dollars of XRP which was dumped on investors. While Ripple may be considered a security, it's not really up to us to decide.
The Moderator of the Ripple and XRP Reddit threads also commented, noting that while they do not have a problem with critical articles about Ripple and XRP, this article was so full of bad information and intentionally incendiary that it's certainty FUD (Fear uncertainty and doubt operating) and so was removed in accordance to our rules.
So what do you guys think of this article, Redditor CL20's opinions and Ripple in General?
Do you agree with the author and believe that Ripple is a scam?
Or do you think he's clearly misinformed and just stirring up some FUD?
Let me know what you guys think in the comments below! It's Cindy with CryptoPig, Catch you guys around.
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.