In a now-deleted post on X, ZachXBT stated that he no longer intends to help XRP holders, despite having previously helped identify a security vulnerability of Ledger. He argues that this community does not provide much value to the cryptocurrency ecosystem as a whole, viewing XRP holders as 'exit liquidity' for insiders.
This term refers to the action where early investors or founders sell their stakes to newcomers, often at a higher price.
Not just XRP is in the spotlight
The criticisms are not limited to Ripple. ZachXBT also grouped Cardano, Pulsechain, and Hedera together, calling them 'multi-level marketing chains' - projects he believes operate more like marketing schemes than true innovation hubs. He argues that these ecosystems only reward early investors without providing significant returns for later investors.
Focus on insider trading
A part of the controversy stems from the scrutiny of large money transfer transactions involving Chris Larsen, the co-founder of Ripple. Just last month, wallets associated with Larsen transferred 50 million XRP, worth about $175 million, most of which was sent to exchanges. These transactions coincided with a sudden spike in XRP's price to $3.60 before dropping below $3.10.
Earlier this year, ZachXBT reported an additional $109 million transferred to exchanges from wallets linked to the founder, raising concerns about insider selling.
XRP maintains its position
Despite the criticism, XRP has shown resilience. The resolution of the long-standing lawsuit with the SEC has removed a major barrier, while rumors of ETF funds and new products like the XRP credit card have boosted confidence. Currently, the community remains divided between critics who argue that insiders are cashing out and investors betting on long-term growth.
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