Ripple Appears to Violate Coinbase Crypto Listing Framework

Ripple Appears to Violate Coinbase Crypto Listing Framework

Coinbase announced the listing of Ripple (XRP) on Coinbase Pro yesterday. The massive-supply token saw a significant price rise on the news. However, as first identified by Diar, Coinbase’s listing of the bank-friendly coin appears to violate its own Digital Asset Framework, which outlines requirements which cryptocurrency assets must meet prior to their listing on the US exchange.

Coinbase’s GDAX Digital Asset Framework outlines the types of crypto tokens it will list. On page five of the document, it states:

“The ownership stake retained by the team is a minority stake. There should be a lock-up period and reasonable vesting schedule to ensure the team is economically incentivized to improve the network into the future.”

While the latter part might be true, Ripple Labs is far from owning a minority stake. XRP’s open secret: Ripple Labs controls over 60%, either in escrow to fund operations or direct possession of company founders. People frequently comment on this fact, especially when discussing the actual network market capitalization of Ripple. A report from Messari Research finds that Ripple may have a market capitalization exaggeration of around 50%.

Of course, Bitcoin is not innocent, either. Many of its total coins are lost or “hodled” to the point they will never be traded. In any case, is XRP really worth a sum total of over $13 billion? A massive sell-off would provide answers. But we’ve seen what happens to the price of XRP during bear markets and sell-offs.

All of these reasons are part and parcel to the policies Coinbase previously set for itself. Ripple launched in the early days of the first ICO run. ICOs were conducted informally and scams were more rampant but less successful. It’s no different than any other token with a huge economic control in the hands of the “team.”

XRP’s listing is not a direct violation of anything – the standard applies to ICOs rather than established cryptocurrencies like XRP. But one wonders why Ripple Labs should be treated any differently.

But, in reality, the “founder reward” is high no matter where you look. Satoshi Nakamoto holds in excess of 1 million bitcoins. Vitalik Buterin maintains at least one wallet with more than 300,000 ether at present.

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At the same time, Coinbase has received criticism for its listing of several cryptocurrencies in recent months.
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