Ripple has been consistently expanding its horizon in the cross-border remittance field. Its cryptocurrency, XRP, also registered an extended slump in a rather bullish market, over much of the past few months. XRP failed to post substantial gains until recently, even as Bitcoin breached multiple resistances. On May 14, following news related to Bitcoin’s surge over $8,000 and Coinbase enabling XRP trading for its New York users, the coin saw a double-digit resurgence.
Just when it seemed like XRP was finally on its way out of a bearish pullback, fresh trouble surfaced. In a Twitter thread, Ryan Selkis, Founder of Messari Crypto, stated that his FOIL request with the NYDFS regarding Ripple’s XRP II affiliate sales and discounts was denied, hinting at foul play on the part of Ripple and its subsidiary.
XRP II, LL is a subsidiary of parent company, Ripple, and is registered as a licensed money service business, mostly to institutional investors. In his FOIL request, a formal submission requesting information from New York state on the basis of New York’s Freedom of Information Law [FOIL], Selkis had requested for information on three aspects of XRP II.
The first question was regarding the “average sales price that XRP II has offered its enterprise customers from 2016 to 2019,” while the second and third questions were dealt with the implied discount to spot rate and the total XRP sold via XRP II, respectively. Though Selkis filed the FOIL request on January 29, 2019, it was only on May 13 that he received a reply, which is approximately three-and-a-half months after the filing date.
1/ In January, I filed a FOIL request with the NYDFS regarding Ripple's XRP II affiliate's sales and discount policies.
Remember, XRP II HAS A BITLICENSE.
Today, after 3.5 months, I received a response. They denied the request.
— Ryan Selkis (@twobitidiot) May 13, 2019
According to the reply he received, the reason stated for denial of the FOIL was that disclosure of such sensitive information would cause “substantial competitive injury to the subject enterprise.” Commenting on the reason given by the financial body for denying his request, Selkis stated in an apparent sarcastic tone that “disclosing the discounts Ripple and its affiliate were negotiating with its heavily marketed commercial partners was off-limits.”
He further accused NYDFS of deeming “public benefit” inconsequential and alleged that NYDFS did not believe that public XRP investors had the right to know the discounts to spot that its affiliates receive and the implied dilution rate.
Furthermore, he equated the denial of his FOIL request to “regulatory capture.” He said,
“If a regulated entity can get away with this sort of material obfuscation, imagine what the status quo is today in crypto.”
Though it is unlikely that this news would affect the larger public sentiment, many Twitter users encouraged Selkis to get to the bottom of this and expose any illegal doing. Twitter user, @TheGloballer, commented,
“I love the truth-seeking for shady crypto practices. Keep up the pursuit. Especially XRP.”