Ripple Co-Founder Backed Crypto Project Faces XRP Community Backlash Over Token Sales

Yellow, a blockchain project backed by Ripple co-founder Chris Larsen, has faced criticism from XRP community members over reported token sales. The controversy intensified after XRPL developer Kaj Leroy questioned transactions involving approximately 20,000 XRP during the project’s token launch.

According to Leroy’s November 4 post on X, the transactions raised concerns about how Yellow handled its initial trading activity. The disagreement also involved XRP influencer JC Rivera, who defended emerging projects against negative reactions from community members.

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Yellow Team Explains 20,000 XRP Token Sales as Arbitrage

Yellow launched its token on Ethereum and the XRP Ledger, allowing trading across two separate blockchain networks. Initial trading reportedly produced different token prices, with the XRPL market recording higher valuations than Ethereum.

The reported difference emerged amid strong demand and the absence of a direct bridge connecting both networks. Meanwhile, questions emerged about token sales reportedly involving a wallet associated with Yellow’s development team.

Project representative Burak Cem reportedly described the transactions as “team wallet arbitraging” during private conversations. The explanation suggested that the transactions aimed to reduce pricing differences between Ethereum and XRPL markets. Nevertheless, community members questioned the explanation and raised concerns about the timing of the reported sales.

XRPL Developer Kaj Leroy Challenges Yellow’s Token Sales

The disagreement intensified when XRP influencer JC Rivera criticized negative reactions toward emerging projects within the XRPL ecosystem. Rivera argued that community members sometimes criticize unfamiliar projects without fully understanding their operations or intentions.

Responding directly, Leroy questioned Yellow’s trading activities and challenged the explanation surrounding the reported transactions. According to Leroy, developers had “dumped 20k xrp worth on their holders” shortly after trading began.

Leroy also criticized the justification involving arbitrage, arguing that such activity conflicted with efforts to attract users. The exchange highlighted disagreements between community members over how new blockchain projects should approach token launches.

Chris Larsen’s $10 Million Investment Draws Community Interest

Yellow previously attracted a $10 million personal investment from Ripple co-founder Chris Larsen, establishing a connection with the broader XRP ecosystem. The project plans to develop clearing infrastructure for AI agents, supporting automated financial transactions.

Meanwhile, Leroy’s criticism has added to the debate surrounding Yellow’s token launch and reported trading activities. The available public exchange does not independently establish the ownership of the wallet involved in the disputed transactions. Yellow has not provided additional official clarification addressing the criticism, leaving the reported arbitrage explanation at the center of the disagreement.