Ripple has long gotten flak for controlling the majority of “decentralized” cryptocurrency XRP. That’s what makes the reported mission of a small, new cryptocurrency company called Valor so intriguing.
On Tuesday, Axios reported that “something called Valor” is planning a hostile takeover of XRP, which could potentially decentralize the majority Ripple-owned coin. At this point, it’s hard to say whether Valor could succeed somewhere down the line, but it’s not looking especially likely, as the task would take a lot of money that Valor doesn’t seem to have. Plus, as Axios business editor Dan Primack points out, the information was leaked to the publication, which means those responsible for the leak might have ulterior motives. Those motives could be driving down the price of XRP to buy and later sell, without any intention of buying into Valor.
Valor CEO and founder Vishal Harpalani confirmed the leak to BREAKER over LinkedIn, writing, “This was a leak, so we’re not commenting further at this time.” Harpalani had already told Axios about Valor’s plans to take over a “top 10 cryptocurrency,” but wouldn’t name which one.
Here’s what we know. Harpalani started Valor in 2017, when he filed a form with the SEC stating plans to raise $160 million in an initial offering. Besides heading up Valor, Harpalani is currently a partner at venture capitalist fund Flight Ventures and is on the board of directors of Nightingale Security and Otto Robotics, Inc., both West Coast tech companies. According to LinkedIn, Valor has between two and ten employees, is based in San Francisco, and is a nonprofit. Its central mission is to build a remittance system for the unbanked that caters to developing countries. XRP is big on international payments, so a takeover would help Valor get its foot in the remittances door.
Axios reports that Valor wants to drive down the price of XRP with the money it raises, fork the network, get all non-Ripple XRP holders to accept one Valor for each of their XRP, and then spread the leftover Valor among all the new cryptocurrency’s holders. This would further decrease XRP’s value and encourage XRP owners to trade in their coin for Valor. Essentially, this method would let participants buy into the new blockchain network for cheap.
Are Ripple executives threatened by Valor’s leaked plans? Not outwardly. Here’s what Ripple’s CTO and CEO had to say about it, respectively:
Whether Ripple executives really find the idea of hostile XRP takeover “amusing,” their assessment that it’s not a threat is probably correct. At least, for now…