Ripple Labs is the company-creator and a developer of the Ripple payment protocol and exchange network. Originally named Opencoin and renamed Ripple Labs until 2015, the company was founded in 2012 and is based in San Francisco, California. The company works in the cryptocurrency and blockchain sphere.
Ryan Fugger conceived Ripple in 2004 after working on a local exchange trading system in Vancouver. The intent was to create a monetary system that was decentralized and could effectively empower individuals and communities to create their own money. Fugger later built the first iteration of this system, RipplePay.com. Concurrently, in May 2011, Jed McCaleb began developing a digital currency system in which transactions were verified by consensus among members of the network, rather than by the mining process used by Bitcoin. In August 2012, Jed McCaleb hired Chris Larsen and they approached Ryan Fugger with their digital currency idea. After discussions with McCaleb and long-standing members of the Ripple community, Fugger handed over the reins. In September 2012, Chris Larsen and Jed McCaleb co-founded the corporation OpenCoin.
OpenCoin began development of the ripple protocol (RTXP) and the Ripple payment and exchange network. On 11 April 2013, OpenCoin announced it had closed an angel round of funding with several venture capital firms. That same month, OpenCoin acquired SimpleHoney to help it popularize virtual currencies and make them easier for average users. On 14 May 2013, OpenCoin announced that it had closed a second round of angel funding. In July 2013, Jed McCaleb separated from active employment with Ripple.
On 5 May 2015, Ripple Labs received a civil money penalty from U.S. Treasury's Financial Crimes Enforcement Network (FinCEN).
On 6 October 2015, the company was rebranded from Ripple Labs to Ripple.
On June 13, 2016, Ripple obtained a virtual currency license from the New York State Department of Financial Services, making it the fourth company with a BitLicense.
Ripple Labs Investors
Ripple is a privately funded company. It has closed five rounds of funding, which included two rounds of angel funding, one round of seed funding, one Series A round and one Series B round.
|April 2013||Angel||Andreessen Horowitz, FF Angel LLC, Lightspeed Venture Partners, Pantera Capital, Vast Ventures, Bitcoin Opportunity Fund||US$2.5 million|
|May 2013||Angel||Google Ventures, IDG Capital Partners||US$3.0 million|
|November 2013||Seed||Core Innovation Capital, Venture51, Camp One Ventures, IDG Capital Partners||US$3.5 million|
|May 2015||Series A||IDG Capital Partners, Seagate Technology, AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin Opportunity Corp, Core Innovation Capital, Route 66 Ventures, RRE Ventures, Vast Ventures, Venture 51||US$28 million|
|October 2015||Series A||Santander InnoVentures||US$4 million|
|September 2016||Series B||Santander InnoVentures, CME Group, Seagate Technology||US$55 million|
Ripple's revenue sources include professional services provided to financial network operators being integrated with Ripple, software built to integrate legacy financial systems with Ripple and the native currency (XRP). Ripple is also backed by several established investors that provide an additional layer of financial stability.
Programs and projects
Of the XRP80 billion that Ripple Labs was gifted, Ripple follows a distribution strategy that encompasses payments to business partners such as gateways, market makers and charitable organizations.
Ripple Labs began working with the World Community Grid in November 2013. The World Community Grid pools surplus processing power from volunteers’ computers and electronic devices to support humanitarian causes such as fighting AIDS, improving solar energy and defeating cancer. Individuals who join the Ripple Labs team and donate their spare processing power are rewarded with XRP. As of 18 March 2014, Ripple Labs has given away XRP134,528,800 through the World Community Grid at a rate of XRP1,250,000 per day.
Ripple Labs launched a developer portal designed to bring together tools and resources for the developer community. These include an API for its payment network, based on the popular REST API standard. The firm also developed a bounty program for third-party developers, to encourage them to create services for its combined protocol and payment network. The first one was claimed by developer Mathijs Koenraadt who developed a Ripple extension to e-commerce platform Magento. The extension enables Magento to read the Ripple public ledger and create an invoice. European luxury jewelry outlet Rita Zachari has adopted it, and is one of the first merchants to offer a Ripple Wallet payment option at checkout.
Ripple Labs has been involved in several development projects related to the protocol, releasing for example an iOS client app for the iPhone that allows iPhone users to send and receive any currency via their phone. This Ripple Client app no longer exists.
On 2 July 2013, Ripple Labs announced its linking of the Bitcoin and Ripple protocols via the Bitcoin bridge. The Bitcoin Bridge allows Ripple users to send a payment in any currency to a Bitcoin address.
Partnerships and initiatives
In March 2014, CrossCoin Ventures launched an accelerator which funds companies that work to advance the Ripple ecosystem. The firm funds accepted startups with up to in XRP, Ripple's native currency, in exchange for a 3% to 6% stake in diluted common stock. Mentorship and support is provided by CrossCoin and Ripple Labs, Inc.
Ripple also developed early partnerships with companies such as ZipZap, with the relationship called a threat to Western Union in the press.
In cooperation with other industry leaders, Ripple Labs became a co-founding member of the Digital Asset Transfer Authority (DATA) in July 2013. DATA provides best practices and technical standards, including anti-money laundering compliance guidance for companies that work with digital currency and other emerging payments systems. The committee works as a liaison among public officials, businesses and consumers and create common rules to protect consumers. The initiative attempts to create a cohesive voice of Bitcoin community members when interacting with regulators.
Awards and recognitions
For its creation and development of the ripple protocol (RTXP) and the Ripple payment/exchange network, the magazine MIT Technology Review recognized Ripple Labs as one of 2014's 50 Smartest Companies in its February 2014 issue. The criteria for the recognition revolved around "whether a company had made strides in the past year that will define its field."
On 9 February 2014, Ripple Labs was named as a finalist for a 2014 PYMNTS Innovator Award in two separate categories: Best New Technology as well as Most Disruptive Company. The recognition pertains to Ripple Labs work in creating Ripple, an open-source, distributed payment protocol powering a new global value web.
On 12 January 2016, Ripple was listed by UK-based company Richtopia at number 8 in the list of 100 Most Influential Blockchain Organisations.
- February 2015 - Fast Company. The World's Top 10 Most Innovative Companies Of 2015 In Money.
- February 2015 - American Banker. 20 Fintech Companies to Watch.
- August 2015 - Ripple Labs Awarded as Technology Pioneer by World Economic Forum.
- December 2015 - Forbes. Fintech 50.
- December 2015 - H2 Ventures, KPMG. Fintech 100.
- March 2016 - PYMNTS Innovation Project 2016. Best B2B Innovation Award.
- June 2016 - Fortune. 5 Hottest Companies in Fintech.
Ripple Labs FinCEN
On May 5, 2015, FinCEN fined Ripple Labs and XRP II US$700,000 for violation of the Bank Secrecy Act, based on the Financial Crimes Enforcement Network's anti-money laundering (AML) additions to the act in 2013. Ripple Labs agreed to remedial steps to ensure future compliance, which included an agreement to only transact XRP and "Ripple Trade" activity through registered money services businesses (MSB), among other agreements such as enhancing the Ripple Protocol. The enhancement won't change the protocol itself, but will instead add AML transaction monitoring to the network and improve transaction analysis.