Extortionists Demanded 5 Million XRP from Ripple Labs in Exchange for Withholding Compromising Materials

In 2017, during the unprecedented hype around cryptocurrencies, unknown extortionists tried to obtain 5 million XRP from Ripple Labs by threatening to publish video footage that would portray the company in a negative light.

As reported by CoinDesk, citing materials obtained through a Freedom of Information Act request, on October 19, 2017 an unknown person sent Ripple Labs an email demanding payment of 5 million XRP ($1.1 million at the time). In return, he promised not to publish videos that, according to him, depicted the company in a negative light.

According to the documents, the extortion attempt was soon investigated by the FBI’s San Francisco and Canberra offices. In April 2018 the case was closed because the extortionist’s identity could not be established.

The contents of the videos that the unknown person threatened to publish, as well as whether he received the demanded amount, remain unknown. FBI and Ripple representatives declined to comment.

The California-based company was founded in 2012 by Chris Larsen and Jed McCaleb. Originally it operated under the OpenCoin banner, changing its name to Ripple Labs in 2013. Brad Garlinghouse, an economist and entrepreneur, is the company’s chief executive.

Among Ripple Labs’ investors are venture capital firms Andreessen Horowitz, Google Ventures, Lightspeed Venture Partners, Pantera Capital, Accenture and IDG Capital, the Chicago Mercantile Exchange (CME Group), and major financial institutions such as Santander, SBI Holdings and Standard Chartered.

Last year a class-action lawsuit was filed against the California-based company and Brad Garlinghouse alleging violations of U.S. securities laws. Ripple representatives deny the allegations in full.

In August 2020, Australian payments company New Payments Platform Australia (NPPA) accused Ripple of illegal use of its brand and trademark “PayID” and of violating consumer-protection law.

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