Ripple CEO Brad Garlinghouse says the San Francisco payments company wouldn’t be profitable without its sales of XRP.
Ripple has received a barrage of criticism from varying members of the crypto sphere for its routine sales of XRP, with some comparing the asset to tokens sold through initial coin offerings, and others suggesting Ripple’s business model is hurting the price of the digital asset.
In an interview with the Financial Times, Garlinghouse confirms that those XRP sales are necessary for the company to stay in the black.
“We would not be profitable or cash flow positive [without selling XRP], I think I’ve said that. We have now.”
In the interview, Garlinghouse also addresses longstanding questions about whether Ripple compensates companies that join RippleNet, noting that “it depends upon the shape and size and type and how high a priority” they are.
Ripple also pays one of its highest-profile partners, MoneyGram, “Ripple market development fees.” That’s in addition to the blockchain startup’s $50 million investment in MoneyGram, which now leverages XRP to move 10% of its average daily volume between the US and Mexico.
MoneyGram initially categorized the Ripple market development fees as revenue, but – after a consultation with the Securities and Exchange Commission – it now accounts for the fees as offsets to expenses, according to a company press release.
In a recent SEC filing, MoneyGram confirms that those market development fees are paid in XRP.
“The Company is compensated by Ripple in XRP for developing and bringing liquidity to foreign exchange markets, facilitated by the ODL platform, and providing a reliable level of foreign exchange trading activity. We refer to this compensation as market development fees.”