By Shelly Melancon (Switzerland)
There is a proverbial spanner in the wheel of Flare network’s much-expected airdrop for XRP holders. After announcing plans to distribute billions of spark tokens to XRP holders, Flare (the XRP-built Smart Contract Utility network) is having a rethink because of tax complications.
The original plan was for Flare to give qualified XRP holders 16% of SPARK immediately. But the remaining tokens will be issued monthly for between 25 and 34 months when the distribution will be completed.
Flare Gives XRP Holders SPARK Options
Per a Flare blog post, there may be tax issues regarding the longer-term distribution of SPARK. “Since the SPARK will become priced once the main net is launched, we are worried that the monthly distribution may be considered as income and be taxed accordingly. However, the initial 15% distribution remain as planned.”
Consequently, Flare network is giving XRP holders two options: the “buy through burn” and the “distribution halt.” XRP holders who chose the former option will burn a yet-to-be specified portion of their 15% SPARK to buy the remaining 85%. However, those who chose the second option will forfeit 85% of the SPARK after receiving the 15% airdrop. Hence, they get a 100% of the supply once the first airdrop is complete.
Flare SPARK options. Source: Twitter
The Flare ecosystem will vote on these two options, but Flare plans to present its findings before voting commences. The project team stated that “we will draft the complete governance proposals, especially our opinions on the merits and demerits of the two options. We will also release the legal basis for option 1. At least 66% of governance votes is required to determine the winner between the two options.”
However, there is a default setting (option three, which is the original plan), and it will require at least a 50% majority of governance votes to be passed,” the notice concluded.
Three Exchanges Move 149 Million XRP in 24 Hours
Amid bearish signals regarding XRP, some wealthy investors are already moving their XRP holdings to other cryptocurrencies. Top crypto analytics Twitter account, Whale Alert, has revealed that Binance and Bittrex moved a combined 149 million XRP within the last 24 hours.
Part of the transaction involved transferring 50 million XRP (about $41 million) by Huobi to Binance.Â
Whale Alert Tweet. Source: Twitter
Whale Alert also observed that the Bittrex exchange transferred about 15 million XRP to Upbit. The final exchange was an internal one with Singapore-based Bybit exchange moving about 84 million XRP between two wallets on the exchange. Thus, a total of 149 million XRP coins ($119 million) was moved in the last 24 hours.
XRP Price Decline
Among the top ten digital currencies by market cap, XRP experienced the largest price decline of about 7% in the last 24 hours. As of this writing, XRP is trading at about 75 cents. The decline comes despite XRP’sXRP’s parent company winning all the legal proceedings so far in its battle with the U.S. Security and exchange commission (SEC). However, bitcoin and Dfinity also experienced price declines.
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