Ripple CTO David Schwartz recently provided an explanation for the decision to liquidate the company’s XRP holdings. The ongoing legal dispute between Ripple and the SEC has seen significant developments. Ripple’s consistent sales of XRP tokens have faced criticism on multiple occasions. In response to these concerns, Schwartz addressed the company’s sales approach and its substantial XRP holdings.
Ripple’s Q1 2024 report reveals that the company holds 4.8 billion XRP coins directly, while 40.1 billion XRP are locked in escrow accounts. The escrowed XRP is released monthly, but the majority is returned to restart the escrow clock. Schwartz stated that selling the coins was the only practical way to obtain liquidity from the XRP holdings, as opposed to letting them remain idle indefinitely. He emphasized that Ripple does not have any plans to significantly increase or decrease its sales.
Following Schwartz’s disclosures, an anonymous cryptocurrency researcher named Darkhorse urged Ripple to reevaluate its tactics. One suggestion was to temporarily halt sales to assess the impact on pricing. However, Schwartz underscored the importance of transparency in Ripple’s operations, stating that intentional price manipulation would be unethical.
Some commenters raised concerns about Ripple’s significant XRP holdings potentially discouraging developers from launching network initiatives. However, recent data reveals a 100% increase in XRP Ledger transactions in the first quarter of 2024, suggesting that this is not the case.
The legal battle between Ripple and the SEC remains ongoing, with no resolution in sight. Ripple filed a response to the SEC’s request for a $2 billion penalty, arguing that it is unjustifiably harsh considering the absence of charges related to recklessness or fraud.
Despite these legal challenges, XRP has performed well in the market. The current price of XRP stands at $0.5356, reflecting a 4.42% increase from the previous day and a bullish position of 6.01% over the past week.
The SEC’s recent actions against cryptocurrency companies have drawn criticism, with Coinbase’s chief legal officer, Paul Grewal, suggesting that the regulator may have abused its authority. Grewal raised concerns about the SEC’s departure from customary procedures, casting doubt on the veracity of its claims.
In conclusion, Ripple’s decision to liquidate its XRP holdings has been explained by CTO David Schwartz, who addressed concerns about the company’s sales approach. The legal dispute with the SEC continues, while XRP maintains a strong position in the market.