In the world of cryptocurrencies, there has hardly been a currency which is as polarizing as Ripple (XRP). Many who love the currency have invested heavily in it while there are many who have some harsh words to say about it. The currency has been making it to the news time and again. Yesterday, it surprised everyone as it climbed the ranks to overtake Bitcoin Cash, and later Ethereum to take the second spot in the charts. Today, Ripple is in the middle of another controversy.
Earlier this year, Ripple ordered BitStamp to freeze the funds of former co-founder of the company, Jeb McCaleb. While Ripple has marketed itself as a payment method which makes use of ‘decentralized gateways’, in reality it is indeed a centralized technology – thereby having a greater extent of control than many other cryptocurrencies which are truly decentralized.
One such example of the control that Ripple has over your funds was visible in today’s case. In August of 2014, Ripple introduced ‘Balance Freeze’ – which was a feature which gives the company the power to freeze funds from being traded in particular accounts! This feature is dangerous as the governments can use it to freeze funds of users in the long run.
However, the abuse of power was at public display earlier this year as the funds of former co-founder Jeb McCaleb were frozen on BitStamp. Ripple urged BitStamp to stop McCaleb from transfering XRP worth $1 Million at once. However, his funds were frozen due to McCaleb having agreed earlier that he will not sell XRP worth $10,000 at once.
Following BitStamp being forced to freeze McCaleb’s funds, BitStamp has filed a case in the California district court where the courts will determine if McCaleb has indeed breached the contract and whether his funds should be frozen or not. This incident is a reminder of the fact that despite its constant portrayal as a semi-decentralized currency, there’s a lot of control that can be exercised upon your XRP by the company!