In the shadow of the 2026 auction, where a single card became a symbol of both fortune and folly, the specter of legal retribution looms over those who dared to play the game of high-stakes collectibles. The sale, which shattered records, has ignited a firestorm, as the very structure of the deal, criticized by the former CTO of Ripple, David Schwartz, reveals a chasm between the privileged few and the masses who bear the brunt of the risks. What a delightful way to make money-by ensuring that the little people lose their shirts while the bigshots reap the rewards.
Why David Schwartz called deal “awful”
The origins of this controversy trace back to the Liquid Marketplace, a venture co-founded by Paul, where the promise of shared ownership was as illusory as the dreams of the common man. Here, the very fabric of trust is frayed, as investors find themselves ensnared in a web of clauses that favor the powerful, leaving the retail participants to grapple with the consequences of a system rigged in favor of the elite. Ah, the classic “buyback clause”-a clever way to ensure that when the price soars, the big players take the profit, and when it plummets, the little guys are left holding the bag. What a model of fairness!
The dispute is all about a clause that apparently let Paul buy back shares at their original price before selling them on again.
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Supporters of the structure say that the terms of the contract were made clear and that the buyback provision defines the economic limits of participation. Critics counter that this can create imbalance, especially when the valuation goes up a lot after fractionalization.
David Schwartz, known for his work on XRP Ledger blockchain architecture and Ripple CTO Emeritus, spoke out about it on X. He called the structure “awful” and said there was a mismatch in what the different parties were motivated by. According to Schwartz, the arrangement shifted the risk of price decline to fractional holders while reserving the benefit of appreciation for the main owner. He did not go into legal conclusions but framed the issue as one of economic design and fairness.
I agree it’s awful. He shifted the risk of a drop to others and took all the benefit of a gain to himself.
– David ‘JoelKatz’ Schwartz (@JoelKatz) February 16, 2026
Reports online say that a class action lawsuit might be coming against Paul and his associate, Mike Majlak. The plaintiffs are expected to argue that retail investors were misled about the practical impact of the buyback clause. One can only imagine the moral clarity of a system where the rules are written by those who stand to gain the most-and the rest of us are left to wonder if we’ve been played by the very game we thought we were winning.
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2026-02-17 12:56