Did Chris Larsen Use a Nonprofit to Pump XRP?

• RippleWorks put in $500K and 211 million XRP, giving it a major sway over Evernorth voting.
• Larsen-linked groups all backed the same XRP deal, tying nonprofit and for-profit interests.
• The SEC filing warns that these overlapping roles may clash with public shareholder interests.

A new SEC filing has raised questions on whether Chris Larsen used a nonprofit structure to support an XRP-linked public market deal. The filing centers on Evernorth, a company tied to XRP reserves and a planned Nasdaq listing through a merger with Armada Acquisition. Critics say the structure gave Larsen-linked entities voting power and financial upside in the same transaction.

The filing acknowledges Larsen does not have direct control over RippleWorks’ voting or investment decisions. Even so, he co-founded the nonprofit and remains a board member. It lays out a network of related entities with shared exposure to XRP and Evernorth stock. It has led to fresh scrutiny over whether a tax-exempt nonprofit was used in a way that could support the value of XRP or an XRP-related treasury company.

SEC Filing Details Put RippleWorks at the Center

The March 18 SEC Form S-4 shows that RippleWorks Inc., a nonprofit linked to Larsen, invested $500,000 in cash and more than 211 million XRP into Arrington XRP Capital Fund. That fund acts as the sponsor in the Evernorth deal, while RippleWorks gained a majority position among the fund’s limited partners.

Michael Arrington has official control over the sponsor through its general partner. However, a separate agreement says Arrington XRP Capital Fund must consult RippleWorks on decisions involving Evernorth shares. It must also vote those shares based on RippleWorks’ instructions. This gives RippleWorks strong voting influence, even though it does not directly manage Arrington XRP Capital Fund.

Larsen-linked Entities Also Hold XRP

The Larsen Lam Children’s Remainder Trust plans to contribute 50 million XRP in exchange for more than 1.8 million Evernorth shares. It is yet another entity linked to Larrsen. Ripple, where Larsen serves as executive chairman, is also contributing more than 126 million XRP to the same broader transaction.

That structure has drawn criticism because several related parties are tied to the same asset and the same listing plan. If XRP rises before the deal closes, RippleWorks and Ripple can receive additional Evernorth shares through a pricing adjustment. If XRP does not rise, the filing says they will still keep their original allocations at a fixed valuation. Critics say that the setup creates a one-sided benefit tied to XRP performance.

SEC Filing Warns Conflict of Interest with Public XRP Shareholders

The filing includes direct warnings about conflicts of interest. The sponsor’s economic interests differ from those of public shareholders. Similarly, Larsen’s roles at Ripple, RippleWorks, and related entities might lead to conflicts with the interests of Evernorth and future shareholders.

RippleWorks’s 2024 filings show about $1.4 billion in assets. Much of its funding came from assets linked to Larsen, while most of its revenue came from selling part of those holdings. It has added to the debate around whether a nonprofit should play such a large role in a for-profit XRP treasury listing.

Related: Evernorth Files S-4 for XRPN Listing, Targets $1B XRP Treasury