Ripple CTO Sounds Alarm On Controversial XRP Buyback Proposal, Labels It A “Scam”
The XRP buyback theory is a proposition proposed by Jimmy Vallee of Valhill Capital in 2021, who backed XRP to become the world’s reserve currency. Vallee stated that in the future, the global financial system would require a scalable digital asset to address the issue of massive national debts.
However, he said that in order for this to happen, governments would need to possess a substantial number of XRPs, which would have to be purchased from retail holders. Vallee intimated that an XRP repurchase could be conceivable if the SEC action is resolved in Ripple’s favor.
The speculative idea, however, did not impress everyone.
Matt Hamilton, a former Ripple director of developer relations who has been a vocal opponent of the buyback idea, accused Jimmy Vallee of bribery.
Ripple CTO Speaks Out
Ripple’s CTO, David Schwartz has clarified his views about the proposal in his tweet. He mentions that he hasn’t looked at it very closely but it seems like a scam to him. He also reminds everyone about 2012 and 2022 and about what can be learned from it that if anyone is promising high returns with low risk is almost certainly going to rob you.
Clients who trusted Shaver’s to manage their money’s investments allegedly contributed 764,000 bitcoins to his Bitcoin Savings & Trust (BTCST) in 2012, which were worth about $4.5 million at the time. He claimed to use market arbitrage techniques and offered returns of 7% weekly, or 3,641% a year.
However, he used the funds from new investors to repay previous investors. Some funds allegedly were invested in MtGox, which was the world’s largest bitcoin exchange. He also allegedly spent money on extravagant personal products and expenses. Investor losses were estimated at around $1.23 million at the time.
Certain details about the proposed terms for the purchase of XRP tokens from participating token holders seem to have leaked recently.
Deaton Reacts Negatively
John E. Deaton, an attorney, has said categorically that he is not affiliated with Jimmy Vallee’s XRP buyback proposal and has made it clear that he would not accept anything in exchange for his work on the Ripple and LBRY matters. The lawyer acknowledges that his efforts have cost money, but he claims that this hasn’t stopped him since he can afford to pay for them and because it’s the proper thing to do.
The community has emphasized the statements made by David Schwartz and called it a scam. They don’t seem to believe in the buyback proposal and are cautious about it.