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Jed McCaleb, a prominent figure in the cryptocurrency world, played a pivotal role in both Ripple and Stellar. His departure from Ripple in 2014 left many wondering about the reasons behind his exit. David Schwartz, the current CTO of Ripple and co-creator of the XRP Ledger, recently shared his insights on Quora regarding this significant event. In this article, we delve into David Schwartz's explanation for Jed McCaleb's departure and its consequences.
The Discord at Ripple
According to David Schwartz, McCaleb's departure from Ripple was not merely a casual exit. It stemmed from fundamental disagreements with Ripple's management. In Schwartz's words:
“Jed had a lot of bad ideas that the Ripple Board of Directors refused to implement. So Jed founded Stellar based on these ideas.”
One of the initial sources of contention revolved around a proposed giveaway on Facebook. McCaleb wanted Ripple to initiate this giveaway, but the idea was firmly rejected by the Ripple Board. Subsequently, Stellar, after its inception, proceeded with this giveaway, which was widely viewed as an ill-conceived move.
Jed's Divestment and Legal Battles
Another critical point of conflict was McCaleb's desire to divest himself of his XRP holdings. Ripple took legal action to prevent this divestment, leading to a series of lawsuits. The legal battles between McCaleb and Ripple had significant financial implications:
“Thanks to Ripple's failure, Jed's XRP will likely be worth over $1 billion. He will probably be the only person who, despite his best efforts, will become a self-made billionaire,” Schwartz explained.
McCaleb's Response and Creation of Stellar
Schwartz sheds light on McCaleb's reaction to not getting his way within Ripple. Instead of working collaboratively to address differences, McCaleb publicly criticized the company and went on to create a competing platform. In Schwartz's view:
“When companies attract investors, they receive shares with voting rights. Some of them receive seats on the Board of Directors. And you attract smart people who help you make good decisions. Jed's reaction to not getting his way on these issues was to publicly say bad things about the company and create a competitor. In my opinion, unless you believe the company is doing something illegal or highly immoral, betraying its investors and employees in this way is unconscionable.”
Jed McCaleb's Ongoing Role and Wealth
Jed McCaleb remains a notable figure in the cryptocurrency space. As one of the largest XRP holders, he has systematically sold a significant portion of his XRP assets. By mid-November 2021, his XRP sales amounted to $2.147 billion, constituting 80% of his total XRP sales since 2016. McCaleb's financial success is evident, as he was included in the Forbes 400 list of America's wealthiest individuals in 2021, boasting a net worth of $3 billion.
David Schwartz's insights offer a glimpse into the complex dynamics and disagreements that led to Jed McCaleb's departure from Ripple. While McCaleb's actions ultimately gave rise to Stellar, the history of his exit from Ripple sheds light on the challenges and conflicts that can arise within the cryptocurrency industry.
