Ripple Labs Inc., a San Francisco software company that develops XRP, one of the five largest cryptocurrencies, was blackmailed at the height of the crypto mania three years ago, CoinDesk has learned.
Documents obtained by CoinDesk through a Freedom of Information Act request show that an unidentified individual emailed Ripple on Oct. 19, 2017, demanding 5 million XRP — then worth $1.05 million — in exchange for withholding videos it claimed portrayed the company in a negative light.
The Federal Bureau of Investigation’s San Francisco and Canberra, Australia, offices investigated the extortion attempt from Oct. 23, 2017, to April 20, 2018, according to the documents, which do not describe the content in the videos or whether Ripple paid the 5 million XRP.
The case was closed after there was trouble tracking the extortionist down with just an email address, Internet service provider information and an IP address, a computer or a smartphone’s online fingerprint, the documents say.
Asked about the videos and payment request by CoinDesk, Ripple did not respond by press time and the Federal Bureau of Investigation declined to comment.
The privately held company, co-founded in 2012 by CEO Brad Garlinghouse and the competing Stellar virtual currency’s founder Jed McCaleb, is eyeing an initial public offering and was a subject of intense market speculation two years ago when the prices of XRP and bitcoin (BTC) shot up in tandem to historical highs.
The market frenzy put targets on the backs of high-profile cryptocurrency companies in 2018, a record-breaking year for exchange hacks and other crimes victimizing them.
Ripple is funded by Andreesen Horowitz, Google Ventures, Lightspeed Venture Partners, Pantera Capital, Accenture, CME Group, IDG Capital and banks that have layered apps on top of its payment protocol, Santander, SBI Holdings and Standard Chartered.
