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Ripple makes a contrarian move in the face of the crypto meltdown

Protocol Fintech

Good morning, and welcome to Protocol Fintech.This Wednesday: Ripple’s buyback, Stripe blowback, and a bitcoin proponent’s clapback.

On the daily

It was another wild day for the markets, but Brad Garlinghouse is shrugging off volatility — and even making a very counterintuitive move at a time when most investors are urging startups to hoard cash. Read on for more of what the Ripple CEO’s thinking. Protocol Fintech is all about connecting you to interesting people: On Wednesdays, you can expect a to-the-point, one-question interview with an industry figure you’ll want to get to know. And in Overheard, you’ll see who’s gotten everyone talking. We hope you’re enjoying the newsletter — let me know what you think.

— Owen Thomas (email | twitter)

We don’t need your money

Ripple became the most visible target of the U.S. government’s efforts to regulate crypto when the SEC sued the company in late 2020.

But the besieged crypto payments powerhouse did some muscle flexing this week, sending a strong message to the crypto world: The SEC suit hasn’t slowed Ripple down.

Ripple’s move to buy back shares from a $200 million series C round in 2019 was unusual and even surprising. After all, there’s growing fears of another market slump, which would push startups to buckle down for a rougher ride.

Business is good “despite these crazy headwinds,” CEO Brad Garlinghouse told Protocol. Ripple has been growing rapidly over the past two years when “a lot has changed in the crypto world.”

  • Yes, the SEC suit hurt, causing the price of XRP to fall and leading to the loss of some business, Garlinghouse said. And there are more regulatory hurdles ahead likely to affect the entire industry.
  • But Ripple has been growing rapidly, expanding into the NFT market and forming central bank partnerships with monetary authorities in countries like Palau and Bhutan, Garlinghouse said.
  • Ripple has been bulking up financially as a result. The company has “a strong balance sheet” and “more than a billion dollars in cash,” Garlinghouse said.

Stock buybacks can be tricky, particularly for startups. Private companies building up a huge cash position isn’t surprising in this environment, Santa Clara University law professor Stephen Diamond said.

  • It’s “not clear” that Ripple’s decision to buy back shares is “the best way to deploy cash,” he said. “Some investors might wonder why they aren't using cash to expand the business.”
  • Startups are all about growth. Buying back shares may benefit the selling shareholders, but there’s an “opportunity cost,” Redpoint Ventures investor Tomasz Tunguz argued in a 2019 essay.
  • That said, there are reasons why a startup might buy back shares, typically to clean up the cap table in preparation for a future financing event.
  • Balance that against the reality that Ripple is now facing a crypto market that suddenly seems wobbly. Garlinghouse doesn’t seem worried, calling the slump “a part of the journey not dissimilar to what we've already experienced.”

Is the buyback a step toward going public? Such speculation is “an astute observation,” Garlinghouse said. “I think ultimately the future for Ripple is that we will be a public company.” But there are other things they’re focused on — including putting the SEC lawsuit behind them.

– Ben Pimentel (email | twitter)


Everyone wants to IPO—but how do you really get it done, in a way that moves markets and inspires investors? You need the type of confidence and growth that starts from within. WalkMe’s CFO, Andrew Casey, shares how he rethought quotas, metrics, and what drives his teams, so WalkMe could go public—and go big.

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On the money

On Protocol: Diem may be looking to sell off intellectual property or other assets. The Meta-backed stablecoin project’s efforts to launch a cryptocurrency have stalled, Diem founder David Marcus has left Meta and Meta’s Novi introduced a wallet without Diem last year.

Where is former Binance.US CEO Catherine Coley? Nobody has been able to confirm where Coley is after she stopped being active on social media in April 2021. At least one news outlet has reached out to authorities to see if she’s been reported as missing — the official answer is no. But why can’t anybody reach her?

Also on Protocol: Russia can’t seem to agree on whether it wants to ban cryptocurrency. It may need to explore blockchain payments if Western powers follow through on a threatened plan to ban it from using SWIFT.

Experian is going to let you create your own credit reports. The credit reporting firm is launching Go this week, a new program to allow consumers to add recurring non-debt bills to their credit reports, in turn increasing their chances of getting affordable loans.

JPMorgan Chase is acquiring a 49% stake in Viva Wallet. The $1.15 billion investment in the Greek cloud-based payments company values it at more than $2 billion. The large stake points to it being a strategic play, rather than a purely financial one.

The Beatles’ memorabilia and guitars are now up for auction … as NFTs. Julian Lennon, John Lennon’s son, is partnering with NFT marketplace YellowHeart to host an all-NFT auction. Every item will be an audiovisual collectible complete with a personal narration by Julian, who’s keeping the physical objects.

Stripe partnered with Spotify to manage podcast subscriptions. Spotify is aiming to allow creators to monetize podcast subscriptions, accept payments and launch recurring revenue streams. There are no reports of tire irons being involved.

“Rick and Morty” co-creator Justin Roiland is collaborating with Paradigm to redesign NFT sales. The new NFT mechanism by the crypto VC firm will be called CRISP. It aims to adjust prices over time so markets don’t get saturated.

Don't miss

Stores that double as warehouses. Social networks-turned-shopping malls. 60-minute delivery of anything. 30-minute delivery of anything. 15-minute delivery of anything! Protocol’s David Pierce talks to a panel of experts about the ruthlessly efficient, totally social future of shopping on Feb. 1 at 9 a.m. PT / 12 p.m. ET. RSVP here to save your spot.


Bolt CEO Ryan Breslow got everyone talking when he said Stripe and Y Combinator were “mob bosses.” Breslow claimed on Twitter that the payments giant and the startup incubator that backed it will do anything to block competitors. Given that Bolt was rejected from YC and is a direct competitor of Stripe, most are chalking it up to just a Twitter rant — or a clever way to rally his employees and get attention for his company. (Maybe all of the above?)

Binance CEO Changpeng Zhaodoesn’t want to be crypto’s mouthpiece: “Crypto doesn’t need a spokesperson. Bitcoin is king. Haha.”

Though maybe El Salvador’s president, Nayib Bukele, wants the job?“Most people go in when the price is up, but the safest and most profitable moment to buy is when the price is down. It’s not rocket science,” he said as the country bought another 410 bitcoin Friday amid the market rout.

Would you redeem your Membership Rewards for crypto? American Express CEO Stephen Squeri sounded skeptical on Tuesday’s earnings call: “I don’t think you’re going to see an American Express card linked to cryptocurrency anytime soon.”

Jake Chervinsky, head of Policy at the Blockchain Association, doesn’t think his industry has a friend in the SEC. In a talk with the Stellar Development Foundation on Tuesday, he said that Gary Gensler “does not like anything that we’re doing. He thinks that everything other than Bitcoin is a security.”


Club Revenue on Nasdaq digs into the strategies driving revenue growth at the highest performing companies. Tune in as Clari’s CMO Cornelius Willis interviews innovative revenue leaders to learn their tactics for building sales teams that drive unmatched success for their customers.

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Just one question for Jay Woods, chief market strategist at DriveWealth Institutional

Before joining DriveWealth, a fractional investing technology company, Woods served as one of six executive floor governors at the New York Stock Exchange.

What fintech company, besides your own, have you been most impressed with this past year?

Teaching the next generation about financial literacy is more important than ever as the wealth gap continues to grow. Kids’ personal finance platform Goalsetter is preparing younger investors — and their families — to be financially healthy. Through educational resources, budgeting tips and planning tools that promote financial literacy and learning, Goalsetter is helping Gen Z learn how to take control of their financial futures, and it’s been exciting to watch their growth.

Thanks for reading — see you Thursday!

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