An anonymous investigator called “Crypto Reckoning” has published a video containing allegations that three banking partnerships claimed by Ripple, the world’s second largest cryptocurrency project by market cap, are thin at best.
Ripple’s creators came from banking, and, according to Cryptocurrencyfacts.com, determined to create Ripple as a “rreal-time gross settlement system” that would allow banks to conduct fast and cheap international remittances and currency trades.
The project was loudly decried as a sellout by hardcore early crypto advocates, especially Bitcoiners, who claim blockchain tech is unsuitable for private enterprise and say Ripple executives had simply found a way to print and sell unlicensed securities.
According to Coindesk, Ripple created 100 billion tokens and kept 60% for project founders, and the other 40% of the tokens are now circulating.
In May of last year, a Ripple-investor launched a suit against Ripple claiming the company keeps diluting the value of investor-held tokens by selling its reserves on exchanges.
The video questioning Ripple’s claimed banking partners states that the company’s own records show it sold $400 million dollars in the first 8 months of 2018.
“XRP is unique among cryptocurrencies because its value proposition rests largely on its use by banks,” says the video narrator, who then proceeds to telephone three of Ripple’s purported banking partners: Cuallix, Mercury FX and Catalyst.
The first call goes to Catalyst, where the call centre operator says the company uses a system called “Transat” to access the SWIFT system at its correspondent bank, Chase.
The phone representative said that the one cryptocurrency transaction she is aware of was not allowed to proceed “per Chase’s policy” (possibly this was an attempt by a customer to send money to a cryptocurrency exchange).
The investigator then called Cuallix and had a hard time reaching them.
After a day of attempted calls, “Crypto Reckoning” apparently reached someone at Cuallix’s Mexico number, who said that “currently the intersections to external banks are not working properly…we are just having for the moment transfers between Cuallix accounts.”
The call centre operator could not provide information on when the external transfer system would be back up.
The Mercury FX website claims offices in London, Cape Town, and Hong Kong, but Crypto Reckoning says no live people could be reached at any of those offices.
At the end of the video, “Crypto Reckoning” concludes:
“After doing this research, its hard not to think that Ripple executives are selling a false reality, dramatically overstating the value of these partnerships in order to pump the price of XRP, which they then sell vast quantities of for personal profit.”
“Crypto Reckoning” promises more revelatory info about Ripple in forthcoming videos.
Spent some time factchecking Ripple’s claims about XRP usage. Results are…unsurprising.https://t.co/HnyXTBDfiB
— CryptoReckoning (@CryptoReckoning) January 16, 2019
NOTE: Following publication of this article, an individual named Robert Kasprowicz submitted “a market news” release from the Mercury-FX website that states:
“Mercury will be testing payments into China and Mexico with Ripple and we’re most excited about the potential to bring currently unconnected markets into the fast lane of global finance.”
Blokt.com has also reported on Cuallix’s stated intention of using Ripple’s network for remittances:
“Speaking on the sidelines of Ripple’s Swell conference, Cuallix CFO Nicolas Palacios talked about Ripple’s xRapid project and how it brings benefits to cross-border payments in Mexico.”