Ripple CTO David Schwartz has provided an explanation for the decision to sell off the company’s XRP holdings. The ongoing legal dispute between Ripple and the SEC continues to be a major development in the industry. Ripple, a prominent blockchain company, has faced criticism for its frequent sales of XRP tokens. In response, Schwartz clarified the company’s strategy for liquidating its XRP holdings.
Schwartz’s remarks were made in response to discussions surrounding Ripple’s sales approach and the significant amount of XRP it holds. According to Ripple’s Q1 2024 report, there are two categories of XRP: liquid and available XRP in Ripple’s wallets, and XRP locked in escrow accounts. The escrowed XRP is released gradually over a period of 42 months, with the majority being returned to restart the escrow process.
Schwartz explained that selling the XRP was the only practical way for Ripple to access liquidity from its holdings, as simply leaving the coins untouched indefinitely was not a viable option. He stated that the company has no plans to significantly increase or decrease its sales.
Following Schwartz’s disclosures, an anonymous cryptocurrency researcher known as Darkhorse suggested that Ripple reassess its tactics. One recommendation was to temporarily halt sales in order to assess the impact on pricing. Schwartz emphasized the importance of transparency in Ripple’s operations and stated that intentional price manipulation would be unethical.
Commenters also raised concerns about Ripple’s large XRP holdings potentially discouraging developers from launching network initiatives. However, recent data shows that XRP Ledger transactions increased by 100% in the first quarter of 2024, suggesting that this is not the case.
The legal battle between Ripple and the SEC shows no signs of resolution. In a recent filing, Ripple pushed back against the SEC’s request for a $2 billion penalty, arguing that it is excessive considering there were no allegations of recklessness or fraud. Ripple’s Chief Legal Officer, Stuart Alderoty, criticized the SEC for its ongoing intimidation of the crypto industry in the United States.
Despite the legal challenges, XRP has performed well in the market. At the time of writing, the price of XRP is $0.5356, representing a 4.42% increase over the previous day and a bullish position of 6.01% over the past seven days.
The SEC has faced criticism for its actions against cryptocurrency companies, with Coinbase’s Chief Legal Officer, Paul Grewal, urging other firms to scrutinize the regulator’s previous activities. Grewal believes that the SEC may have overstepped its authority and that its departure from standard procedures raises doubts about the validity of its claims.