Coinbase’s surprising move to list XRP earlier in the week is beginning to create headaches for both the exchange and blockchain-based startup Ripple.
Ripple, the parent company behind the XRP coin, has had to deal with several accusations that the company paid for the currency to be listed on the exchange. After nearly a year of being tied to rumors of a Coinbase addition, during which the XRP currency experienced a series of price dips and rallies in investor anticipation, the actual result of the listing has been lackluster.
XRP pumped 8 percent in the 24 hours following the announcement and official onset of trading on Coinbase, with the currency then seeing an erosion of gains in the days following.
Now, both Coinbase and Ripple are having to handle a series of accusations over the long-awaited pairing.
As previously reported by EWN, several analysts including the prominent firm Weiss Ratings have implied potential insider trading occurring from Coinbase in the hours leading up to the listing.
4 hours prior to the announcement of the #XRP listing, crypto spiked 3.5%. Now the rumors have surfaced concerning the possible XRP ‘insider trading’ among #Coinbase employees. Internal investigation yielded no results. What do you think – Did they do it?
Another Twitter user, Sir Bitlord, pointed to irregular behavior on the XRP charts in the immediate hours leading up to the Coinbase announcement, again causing community suspicion.
Want to know how insider trading works?
This $XRP listing on coinbase breaks it down:
Ripple has likewise been questioned by members of the crypto community for its role in the Coinbase addition. The company has made a concerted effort to distance itself in terms of control from XRP, thereby promoting decentralization. However, some community members are now accusing Ripple of buying XRP’s way onto the cryptocurrency exchange.
Ripple’s Head of Markets Miguel Vias has heard the allegations against his company and responded promptly. In a twitter exchange with U.K.-based investor Alistair Milne, who promoted the accusation of Ripple paying for XRP on Coinbase, Vias responded that his company had nothing to do with the listing. Instead, Vias claimed that the addition of XRP was an independent decision by Coinbase, stating
We’re happy to go on the record. Coinbase’s listing of XRP (also, not “our token”) was Coinbase’s independent decision – we did not give them anything to make it happen.
While there is nothing new about coin projects paying for their currency to be listed on larger exchanges–or at least it has been rumored as a frequent industry occurrence–the connection between Ripple and Coinbase has been tough for community members to stomach. For one, it makes Ripple’s position with XRP more problematic in terms of centralization, an association the company has done a commendable job of combating. However, it also places too much control in the hands of cryptocurrency exchanges as gatekeepers to coin adoption.
Last year Vitalik Buterin stirred the industry with his claim that centralized cryptocurrency exchanges could “burn in hell.” At the time, the statement appeared directed at the record profits being made by crypto exchanges despite the falling market prices. Now, after a year of “crypto winter,” industry focus has turned once again towards development and adoption. The emphasis on driving growth through cryptocurrency exchanges alone, as both Coinbase and Ripple would likely attest, should remain a relic of the past.