The controversial proposal has resurfaced again, dominating discussions within the XRP community.
Ripple’s chief technology officer, David Schwartz, has offered his opinion on the controversial XRP buyback proposal, saying it looks like a scam.
The Ripple executive made this known in a tweet yesterday. It came in response to an XRP community member who requested his thoughts on the controversial proposal.
According to the XRP Ledger architect, on the surface, it looks like a scam, though he has not taken a close look at it. Schwartz, referring to unspecified incidents in 2012 and 2022, cautioned users to be wary of anyone offering high returns for low risk.
While Schwartz does not specify, it is likely that by 2012 he is referring to the collapse of the Bitcoin Savings and Trust run by Trendon Shavers, AKA Pirate. The so-called investment platform crashed in a year as Shavers was unable to meet the promised returns of up to 7% per week. After the collapse in 2012, investigations revealed that Shavers spent investors’ money on personal interests.
“I haven’t looked at it very closely,” Schwartz wrote in a tweet yesterday. “But what I have seen looks an awful lot like a scam to me. If we’ve learned anything from 2012 and 2022 it’s that anyone promising high returns with low risk is almost certainly going to rob you.”
I haven't looked at it very closely. But what I have seen looks an awful lot like a scam to me. If we've learned anything from 2012 and 2022 it's that anyone promising high returns with low risk is almost certainly going to rob you.
— David "JoelKatz" Schwartz (@JoelKatz) February 5, 2023
Notably, Valhil Capital managing director Jimmy Vallee introduced the XRP buyback theory in 2021. It is based on his belief that XRP will become the world’s reserve currency as national debt skyrockets globally.
However, according to Vallee, for this to happen, governments will have to own large quantities of XRP. Hence the buyback.
The Valhil Capital executive further suggests that this buyback would not occur in secondary markets, citing the precedent of the Bretton Woods Agreement, where the dollar was backed with gold. According to Vallee, it will happen at a fixed rate, just like gold. Considering the global wealth and fixed XRP supply, the securities lawyer places this rate between $37,500 and $50,000 per XRP.
As reported, Attorney John E. Deaton has distanced himself from the proposal, which mentioned making a payment to the lawyer for his efforts on behalf of members of the XRP community. According to Deaton, he is not expecting payments for his efforts on behalf of XRP or LBRY Credit (LBC) holders, and he will continue to turn down such offers.