Cryptobillionaire Ripple founder Jed McCaleb’s nonprofit lent money to Genesis
Jed McCaleb, an early cryptocurrency pioneer, has become a billionaire as XRP has soared.
Photo by Stellar Development Foundation
The Stellar Development Foundation, a non-profit organization created by Jed McCaleb in 2014, is owed $13.2 million by Genesis, the bankrupt crypto-lending firm.
Crypto lending firm Genesis filed for bankruptcy in the Southern District of New York on Thursday night, making it the latest victim of the crypto market contagion that has vexed investors since the collapse of crypto exchange FTX in November.
New filings revealed that Genesis owes its largest 50 creditors about $3.4 billion. One of those creditors is the Stellar Development Foundation, an organization associated with the Stellar blockchain and its Lumens cryptocurrency. Jed McCaleb, one of the original cryptocurrency founders, founded Stellar in 2014.
Genesis owes the Stellar Development Foundation about $13.2 million, according to the bankruptcy filing. The foundation, which describes itself as a non-profit organization, is Genesis’ 42nd largest creditor.
A spokesperson for the Stellar Development Foundation said in an email Forbes that the organization extended “a limited series of loans” in 2022 to Genesis’ institutional lending desk. “The outstanding claim represents an immaterial part of our overall treasury and does not affect our operations in any way, as we remain well-funded for the current and future pursuit of our mission to create equitable access to the global financial system,” the spokesman said.
The Stellar Development Foundation describes its mission as supporting the “development and growth” of the open source Stellar network. Stellar counts major Silicon Valley investors and entrepreneurs as its advisors, including venture capitalist Keith Rabois, Stripe CEO Patrick Collison and OpenAI CEO Sam Altman, according to the foundation’s website.
The Stellar Foundation’s venture capital arm, the Enterprise Fund, has invested over $55 million in a dozen or so crypto and payments startups. The foundation has also partnered with organizations such as the United Nations Refugee Agency and P2P payment company MoneyGram on various initiatives.
McCaleb, 48, was among the first software engineers to build a cryptocurrency business. In 2010, he started Mt. Gox, which became the first major Bitcoin exchange. He sold Mt. Gox in 2011, before it was hacked.
In 2011, McCaleb began developing the source code for a token called XRP, which merged with payments startup Ripple in 2012. Within a year, McCaleb left Ripple due to reported disagreements with other founders. He signed a separation agreement, which limited the amount of XRP he could sell at one time.
McCaleb, who Forbes estimated to be worth $2.4 billion, is one of the few crypto moguls to have kept their fortunes amid the recent crypto crash. That’s because McCaleb sold a lot of his crypto at the top of the market bubble.
McCaleb liquidated $2.5 billion worth of XRP tokens (before taxes) between December 2020 and July 2022. Today, XRP trades around $0.40 per coin, down about 50% from last year, when McCaleb dumped millions of dollars worth of tokens every week .
