Ripple Defends XRP Sales Amidst SEC Battle and Market Gains

Ripple CTO David Schwartz gave an explanation of the company’s decision to liquidate its XRP holdings. Major developments are still in the legal dispute between Ripple and the SEC. The growing XRP token sales by major blockchain company Ripple have drawn criticism on several occasions. The Chief Technology Officer (CTO) of Ripple, David Schwartz, gave [...]

Ripple Defends XRP Sales Amidst SEC Battle and Market Gains
Ripple
  • Ripple CTO David Schwartz gave an explanation of the company’s decision to liquidate its XRP holdings.
  • Major developments are still in the legal dispute between Ripple and the SEC.

The growing XRP token sales by major blockchain company Ripple have drawn criticism on several occasions. The Chief Technology Officer (CTO) of Ripple, David Schwartz, gave an explanation of the company’s decision to liquidate its XRP holdings.

Escrow Release Methodology and XRP Holdings of Ripple 

Schwartz’s remarks reacted to a discussion that questioned Ripple’s sales approach and substantial XRP holdings. Two primary groups of XRP are liquid and available XRP in Ripple’s wallets and XRP locked in escrow accounts scheduled for regulated release over 42 months, according to Ripple’s Q1 2024 report.

As of March 31, 2024, Ripple held 4.8 billion XRP coins directly, and 40.1 billion XRP were in escrow. Every month, some of the escrowed XRP is released, but the majority is later returned to restart the escrow clock.

Schwartz said that, other than leaving the coins to sit forever, the sales were Ripple’s only practical way to get liquidity from its XRP holdings. The corporation hasn’t made any plans to drastically reduce or increase sales.

An anonymous cryptocurrency researcher going by the name of Darkhorse asked Ripple to reevaluate its tactics in reaction to Schwartz’s disclosures on the company’s XRP sales.

A temporary stop to sales was one recommendation to see how the pricing effect affected things. But Schwartz underlined the need of openness in Ripple’s operations, saying that intentional price manipulation would be immoral.

Growth of the Network and Developer Concerns

Some commenters questioned Schwartz about the possibility of Ripple changing course in the future. They further proposed that the substantial XRP holdings of Ripple could deter developers from launching network initiatives. Not that this seems to be the case. As previously reported by CNF, XRP Ledger transactions increased 100% in the first quarter of 2024.

The SEC and Ripple are still at odds legally, and there is no end in sight. The blockchain startup retaliated in a recent filing against the regulator’s request for a $2 billion penalty cost, which it believes to be excessively harsh. Ripple makes a straightforward case: there were no charges of carelessness or fraud, hence the SEC’s penalty is unjustifiable.

“In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s task is just more evidence of its ongoing intimidation against all of crypto in the U.S.,” said Stuart Alderoty, Chief Legal Officer of Ripple.

Market Insight

Through all of this, XRP has performed well in the market. CoinMarketCap data shows that the price of XRP at the moment of writing is at $0.5356, having increased by 4.42% over the previous day. At 6.01%, this also indicates a bullish position over the last seven days.

The SEC has been under heavy fire lately for its actions against cryptocurrency companies. Remember how, pointing to the SEC’s prosecution against Debt Box, Coinbase’s chief legal officer, Paul Grewal, urged other cryptocurrency firms to investigate the regulator’s prior activities?

Grewal thinks that the SEC may have abused its authority and that its departure from customary procedures calls into doubt the veracity of its assertions.


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