Is Ripple Stealing From XRP Holders? Chainlink Lead Says Yes – Here’s the Full Debate

Ripple announced a historic partnership with the University of Kansas on July 8. The company will have its XRP logo on the team’s jersey patch, marking the first-ever crypto sponsorship of a major college athletics program.

The deal was meant to be a milestone for crypto adoption. Instead, it triggered a heated debate about Ripple’s business model, the relationship between the company and the XRP token, and whether token holders are being exploited.

Chainlink Lead: “Ripple Is Selling a Bank-Themed Memecoin”

Zach Rynes, who works on Strategic Initiatives at Chainlink, posted a critical thread about the sponsorship.

He wrote: “Sponsoring a college sports program with the XRP logo on the jersey doesn’t make much sense if you think Ripple’s primary business is selling financial technology to banks. But it makes perfect sense when you understand Ripple is really in the business of selling a premined, bank-themed memecoin to retail.

Rynes argued that Ripple sells XRP coins that cost them nothing to create, then uses that money to fund corporate acquisitions and equity buybacks. He claimed this builds enterprise value for shareholders at the direct expense of token holders.

He concluded: “Ripple vs XRP is the most egregious example of the token vs equity misalignment problem in the crypto industry.”

One XRP community member responded quickly: “The XRP Family continues to condemn tribalism but Zach Rynes, ‘Strategic Initiatives’ at Chainlink, can’t help himself. Thank God nobody at Ripple wastes any time attacking other ecosystems like we see below. Pathetic.”

The comment highlighted the frustration many XRP holders feel about what they see as constant attacks from other crypto communities.

Rynes Responds: “You Didn’t Understand My Point”

Rynes replied directly: “If you think my post was just ‘tribalism’, then you didn’t understand the point I was making at all.”

He explained his thesis in detail:

“The token vs equity misalignment problem in crypto (where founders ‘double dip’ by selling both tokens and equity, creating misaligned incentives) is one of the largest systemic problems our industry faces.”

“Ripple is simply the poster child of how a company and its equity investors can extract value at the expense of token holders.”

“Specifically, Ripple sells premined (zero cost basis) XRP coins to retail and then uses that money to fund Ripple equity stock buyback and corporate acquisitions, to the sole benefit of its shareholders.”

“Ripple socializes their costs to token holders, and privatizes the gains/revenue for itself and equity investors.”

He ended with a pointed question: “You seriously have zero issue with this toxic arrangement?”

Bill Morgan Fires Back: “Over-Simplistic and Biased”

Bill Morgan, a pro-Ripple lawyer who has followed XRP for years, responded in detail.

He acknowledged that the misalignment theory has “some merit” and should be considered in a risk-reward analysis. But he said Rynes’ framing is “over-simplistic and needs to be heavily nuanced.”

Morgan pointed out that Rynes has an obvious bias against XRP, which makes him incapable of doing a fair analysis. He challenged several of Rynes’ assumptions.

First, Morgan argued that Ripple has made a substantial increase in the value of XRP since 2013. Even if Ripple shares have performed better, XRP holders have still seen big gains.

Second, he noted that Ripple’s sales are now to institutions or OTC desks, not retail. The company has a duty to stockholders, not tokenholders. That is a basic corporate reality.

Third, the acquisitions Ripple is making can expand its reach into traditional finance, which could indirectly support XRP demand and utility. Without disclosure or data, Morgan said, you cannot conclude that these acquisitions will not ultimately add value to both Ripple shares and the XRP token.

Fourth, institutional demand for XRP is increasing. ETFs are attracting capital. Morgan argued that institutions are sophisticated enough to understand the alleged misalignment risk and have still chosen to invest. He called it “arrogant” to assume otherwise.

Morgan’s conclusion: “Institutions have probably formed the same view as the market, that the value of Ripple stock and the value of XRP can and do both increase over time even if not at the same pace.”

He added that while he would consider the misalignment risk in a risk-reward analysis, he “actually do not give it that much weight.”

The Core Debate

The debate centers on a fundamental question: is Ripple extracting value from XRP holders to benefit its shareholders?

The bear case: Ripple holds a massive stash of XRP that cost nothing to create. The company sells XRP into the market, using the proceeds to fund buybacks, acquisitions, and equity value. Token holders bear the dilution and selling pressure. Shareholders capture the upside. That creates a misalignment of incentives.

The bull case: Ripple’s success is tied to XRP’s success. The acquisitions expand Ripple’s reach and can drive adoption of the XRP Ledger. Institutional demand for XRP is growing. Both the company and the token can appreciate over time, even if the pace differs.

Why Is All This Important for XRP Holders?

The debate highlights a risk that many XRP holders may not fully consider. Ripple is a private company with its own shareholders. Those shareholders want returns. The XRP token is a separate asset with its own holders.

If Ripple prioritizes its shareholders over the token, XRP holders could face dilution, selling pressure, and weaker price performance. On the other hand, if Ripple’s success drives XRP adoption, both groups benefit.

The truth is likely somewhere in between. Ripple’s acquisitions do support the ecosystem. But the company is also selling XRP to fund its operations. That selling pressure is real.

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