- SEC filings suggest Ripple co-founder Chris Larsen and related players could gain significant influence over XRP treasury firm Evernorth and its voting rights.
- Protos sees this as a potential conflict of interest from which parties close to Larsen could benefit financially.
A report from Protos has uncovered a dubious XRP transaction involving Ripple co-founder Chris Larsen that will be processed via a planned Nasdaq listing by Evernorth. The core issue is the question of how much influence Larsen, Ripple, RippleWorks and associated vehicles can have on the future listed XRP treasury company and what conflicts of interest this creates for future shareholders.
How Ripple founder Larsen could gain influence
Die revelation based on a 1,158-page SEC Form (S-4) dated March 18. According to Protos, it is disclosed that RippleWorks Inc., a tax-exempt non-profit organization co-founded by Larsen, contributed $500,000 in cash and 211,319,096 XRP to the Arrington XRP Capital Fund. As a result, RippleWorks holds the majority of the limited partner shares of this fund, which contractually owns the contributed XRP in full Evernorth-need to invest in stocks.
Formally, control lies with the fund’s general partner, an LLC whose sole managing member is Michael Arrington. However, according to the report, Arrington is contractually obliged to involve RippleWorks when making decisions about Evernorth shares and to vote the shares according to their instructions. The wording in the filing is clear:
“The economic interests of the sponsor are different from the economic interests of the holders of the public shares. This structure could create potential conflicts of interest between Mr. Larsen’s duties to Ripple, his influence over RippleWorks’ investment in the Arrington XRP Capital Fund, and the interests of Evernorth Holdings Inc. and its shareholders.”
According to Protos, the Larsen Lam Children’s Remainder Trust is also contributing an additional 50 million XRP to the deal and will receive 1,832,454 Evernorth shares in return. At the same time, Ripple itself contributes another 126,791,458 XRP to the same company. Cash and XRP from Larsen’s non-profit, from Ripple and from a trust associated with his family flow into the same Nasdaq transaction.
The SEC documents also attempt to weaken the influence. Larsen has “no direct control over RippleWorks’ voting or investment decisions regarding the Arrington XRP Capital Fund.” Furthermore it says:
“His dual roles and connections could create situations in which his interests as an executive of Ripple differ from or conflict with the interests of Armada Acquisition and the holders of Armada Acquisition’s Class A common stock.”
There is also the financial incentive. If XRP rises before the transaction closes, RippleWorks and Ripple will receive additional Evernorth shares through a closing adjustment mechanism, according to the report. If XRP falls, a contractually agreed share allocation still remains.
Also explosive is Protos’ revelation that RippleWorks had $1.4 billion in assets in fiscal 2024, according to IRS filings, with 89% of 2024 revenue coming from sales of XRP, while CEO Doug Galen earned $845,945 in 2024.
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