‘Ripple Business Is Selling XRP’: Forbes Report

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John Hyatt, a senior wealth reporter at Forbes, published an investigative report on Ripple’s business practices and the company didn’t come out right. Specifically, it’s about XRP purchases and sales and how Ripple has whitewashed the numbers to market its core business.

While cross-border payments with and without XRP are known to be Ripple’s core business, only one line of business that actually makes money is with XRP, according to Hyatt. For this reason, the company is looking for a good deal to sell the fast-growing XRP-based on-demand liquid (ODL) payment technology.

However, the Forbes journalist raises questions about whether cross-border payments using XRP will continue to increase as long as the company is in external advertising. But new documents from the crypto company’s Asian partner Tranglo suggest that customer adoption is slowing. So why is XRP selling accelerating?” wrote the investigative reporter.

These are the allegations against Ripple.

The report focuses on Malaysian payments company Tranglo, which Hiatt says has become central to Ripple’s story. “Tranglo has become an integral part of Ripple’s core offering, a demand-based liquid, short-term credit product.”

In March 2021, about three months after the SEC sued the company, Ripple bought 40% of the company for an undisclosed sum. After a year-long ODL pilot, Trango has rolled out XRP-based technology to all of its customers.

However, the company’s financial records show that only 8 of Hawala’s 91 customers use XRP. The most explosive related special purpose entity is GEA Ltd. It is the one that handles most of the business.

This is an affiliate of the Flawless Group based in the Cayman Islands. The major shareholder of Tranglo and Seamless is Alex Kong, a Singapore-based entrepreneur. He is also the CEO of TNG Asia – also a subsidiary of SimAlbus – which offers the TNG Wallet, which is popular in Hong Kong with over 500,000 downloads and is believed to be the main user of ODL for Trango.

For the company, the cooperation with the blockchain company will bring high profits. The above mentioned companies They will account for 6.2 percent of Tranglo’s $44.7 million in revenue in the first three quarters of 2022, Hyatt said. GEA generated $1.327 million in revenue for Trango in the first six months of 2022. Annualized, this is 73% of the revenue driven by XRP.

The reporter therefore indicates that Tranglo may have a financial interest in artificially pumping XRP amounts through ODL. Along these lines, Hyatt pointed out that there is no limit to the amount of XRP that Ripple can sell through the Tranglo ODL facility, regardless of Tranglo’s XRP demand. So the main charge is:

This raises the issue of whether Ripple is a money transfer business using XRP to support XRP’s key ODL product, or whether the company is simply using ODL to help sell its XRP store.

Doubts about intentions

Hyatt also emphasized in the article that ODL is the key to its success as customers need to buy XRP from the company. In the year In 2021 and 2022, Ripple made $2.7 billion in profits from XRP “from ODL-related sales.” On the contrary, anonymous sources told Forbes, the software business (with RippleNet) is unlikely to be profitable.

Martin Walker, long-time XRP skeptic and director of banking and finance at the Center for Evidence-Based Management, also weighed in on the report:

Ripple continues to work hard to promote its story that they are improving remittances and cross-border payments, but every time information about the reality comes out, all they do is sell XRP. This is the crux of the story.

Interestingly, Forbes reached out to Ripple Labs for comments on the report’s main findings. However, CEO Brad Garlinghouse emphasized that some of the numbers from the company’s SEC filings are inaccurate and that Trango is only a small part of the business. But Hyatt’s conclusion:

Whether or not XRP ever becomes the elixir of cross-border payments is immaterial to Ripple. With dedicated partners like Tranglo, Ripple’s apparent core business—selling more XRP than it buys—could do well.

At press time, the price of XRP was trading at $0.4981.