Blockchain analysis firm Messari has launched a scathing attack on Rippleworks and its executives, claiming that Ripple used a $174 million donation to the foundation as a tax write-off.
After examining Ripple’s ‘Return of Private Foundation’ form (Form 990), Ryan Selkis, the founder of blockchain analysis firm Messari Pro Research, alleged that Ripple executives were using the Ripple Foundation for Financial Innovation, or ‘Rippleworks’, as a “corporate and executive tax shelter” and had failed to dispense grants to charities.
Discussing charitable donations made in the 2018 tax year by Rippleworks, Selkis wrote:
“…the entity affiliated with Ripple and its co-founder Chris Larsen granted exactly $0 to other charities out of a staggering $1.2 billion AUM.”
Rippleworks was established to promote financial inclusion and donate funds to impoverished communities.
Instead, Selkis alleges that this money went to insiders at Ripple:
“At the same time, the Ripple Foundation did pay its CEO a $665,000 salary, while investing $30 million in Michael Arrington’s XRP Capital. Arrington, of course, is a personal friend of Ripple CEO Brad Garlinghouse.”
Selkis wrote that while he wasn’t suggesting Brad Garlinghouse was personally laundering $400 million for himself, the Ripple network was still “pound-for-pound shadier than Bitcoin”.
Official response
In a series of replies to Selkis via Twitter, co-founder and executive chairman of Ripple Chris Larsen outlined “several inaccuracies” in Messari’s report.
Outlining the work the Rippleworks Foundation had been doing in economically disadvantaged areas, Larsen tweeted:
After XRP’s growth in late 2017, RW reclassified as a non-operating foundation which has allowed us to distribute $25M+ in high-impact financial support to social ventures bringing people out of poverty across countries like Senegal, Kenya, Nigeria, and Myanmar. (3/4)
— Chris Larsen (@chrislarsensf) November 22, 2019
Larsen claimed that the 990 form that Messari had scrutinised was for the fiscal year ending April 2018.
As such, the figures Selkis cited were a result of a reclassification of Rippleworks which had taken place the previous year.
The Rippleworks Foundation has since changed from a project-based program to directly providing financial support.
The new figures from Ripple’s 2019 fiscal year, Larsen tweeted, will be made available in the coming weeks.
Our 2019 fiscal year (which runs April 2018-April 2019) reflects this change in our resources and operations, and FYE 2019 990 will be publicly available in the coming weeks. (4/4)
— Chris Larsen (@chrislarsensf) November 22, 2019
Responding, Selkis simply tweeted that he looks forward to publishing an update when the 2019 fiscal year 990 form becomes available.
https://twitter.com/twobitidiot/status/1197712879417511936
To read more about Rippleworks and its donations, click here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.