Ripple Co-founder XRP Wallet Displays Suspicious Activity

The XRP wallet belonging to Ripple co-founder Jed McCaleb has been displaying suspicious activity since July 2022, as a series of withdrawal attempts seek to take out millions of XRP.

Flipthechain, a crypto educational content provider, first called the public’s attention to the withdrawal attempts in a recent post on X.

Notably, the transactions began on July 17, 2022, but they all failed, as the XRP wallet had already been depleted by McCaleb.

Recall that McCaleb, who co-founded OpenCoin (now Ripple) with Chris Larsen and Arthur Britto in September 2012, withdrew and sold off all the XRP allotted to him on July 17, 2022, after eight years of systemically dumping the tokens from his “tacostand” wallet.

McCaleb’s XRP Holdings

For context, each of the three Ripple founders received a share of 20 billion XRP for their contributions to the firm.

However, Jed McCaleb left Ripple in 2014 to launch Stellar after a disagreement with the executive team. McCaleb left with his XRP holdings, amounting to about 9 billion XRP. 

McCaleb aimed to dump his XRP holdings, but a lock-up agreement entered by the Ripple founders limited his sales to 1 billion XRP per year. This agreement aimed to avoid the cascading market effect of a large-scale dump. 

McCaleb continued to withdraw and sell off his XRP after his departure, eventually emptying the “tacostand” wallet in July 2022. 

Suspicious XRP Withdrawal Attempts

However, a look at the Ripple co-founder’s wallet shows that there have been more withdrawal attempts nearly a year after McCaleb emptied the wallet. Interestingly, the first of these suspicious attempts came up on July 17, 2022.

At the time, the wallet still held over 1 million XRP. Nonetheless, this withdrawal attempt sought to take out 3.89 million XRP on two occasions. Both transactions failed, as the address held much less than that. 

About 10 hours after the failed withdrawal attempts, McCaleb made his last successful withdrawal on July 17, 2022, at 18:31 (UTC), amounting to 1.1 million XRP. On-chain data confirms that Jed McCaleb eventually moved these tokens to Bitstamp and sold them off, as with previously withdrawn ones.

While the July 2022 outbound transaction was the last one, a slew of other withdrawal attempts came up last May, looking to take out 2.9 million XRP and 2.5 million XRP on several occasions. 

Notably, there were fourteen withdrawal attempts, from May 28, 2023, to June 11, 2023. All withdrawals failed because the wallet only has a balance of 157 XRP, out of which 18 XRP is reserved, leaving just 139 XRP as an available spendable balance.

Possible Explanation

The attempted transactions have sparked speculation, with some XRP proponents suggesting that they could represent attempts to siphon funds from the Ripple co-founder’s wallet. However, this is not entirely accurate.

A close observation suggests that the transactions are due to bot activity. Specifically, the nature of the transactions shows that McCaleb must have activated a bot to withdraw certain amounts of XRP at a specified interval. 

However, it appears this automated withdrawal prompt has not been deactivated, leading to more withdrawal attempts while the wallet is empty. 

Recall that the first of these failed transactions occurred in July 2023, when the wallet still had over 1 million XRP. Despite having this amount, the balance was not sufficient to meet the automated withdrawal demand, leading to a failed transaction.