#

Ripple’s CTO David Schwartz Sheds Light on XRP Sales Strategy

Major blockchain company Ripple has faced multiple criticisms over its increasing sales of the XRP token. On May 19, Ripple’s Chief Technology Officer (CTO), David Schwartz, explained why the company was selling its XRP holdings.

Ripple’s XRP Holdings and Escrow Release Strategy


Schwartz’s comments were in response to a thread that criticized Ripple’s large XRP holdings and sales strategy.

Can you explain why @Ripple are the biggest sellers of xrp please?

— Steve (@Srwtatty) May 19, 2024

As detailed in its Q1 2024 report, Ripple’s XRP holdings are divided into two main categories: liquid and available XRP in Ripple’s wallets and XRP locked in escrow accounts set for controlled release over 42 months.

As of March 31, 2024, Ripple held 4.8 billion XRP tokens directly, while another 40.1 billion XRP were locked in escrow.

A portion of escrowed XRP is released each month, though most are subsequently returned to reset the escrow clock.

Schwartz portrayed the sales as Ripple’s only viable option for accessing liquidity from its XRP holdings besides letting the tokens sit indefinitely. The company has not indicated plans to halt or dramatically ramp up the sales.

In response to Schwartz’s revelations about Ripple’s XRP sales, an anonymous crypto researcher known as Darkhorse urged the company to reconsider its strategies. One suggestion was temporarily halting sales to gauge the price impact.

I agree with some of your points. XRP liquidity hasn’t met expectations. Ripple established the escrow for more than storage listed below in the objectives of creating the Escrow —it aimed to boost volume and price appreciation. However, volume has decreased, with DEX usage down… pic.twitter.com/3FX1hjlQDX

— ĐΛRKHØRSΞ (@DarkhorseDNME4) February 19, 2024

Schwartz stressed the importance of transparency in Ripple’s actions, asserting that deliberate price manipulation would be unethical.

Some users asked Schwartz if Ripple might change its approach in the future. They also suggested that Ripple’s large XRP holdings might discourage developers from building network projects. This doesn’t seem to be the case. As CryptoNews reported, XRP Ledger transactions jumped 100% in the first quarter of 2024.

As the third-largest crypto by market cap, XRP is trading around $0.50 per token, down from recent highs around $0.80. After an upward price trend from May 2023 to April 2024, XRP has pulled back around 22% and is currently testing support levels. At press time, XRP trades at $0.517.

SEC Criticized for Aggressive Stance on Crypto Firms


Ripple’s legal tussle with the SEC continues, and there is no end in sight. In a recent filing, the blockchain company pushed back against the regulator’s demand for a $2 billion penalty fee, which it deems excessive and overly punitive.

Ripple’s argument is simple – the penalty demanded by the SEC is not justifiable since there were no accusations of reckless or fraudulent behavior.

“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,” Ripple Chief Legal Officer Stuart Alderoty explained.

The SEC has been getting a lot of flak lately for its crackdown on crypto firms. Recall that Coinbase’s chief legal officer Paul Grewal had called on other crypto companies to query the regulator’s previous actions, citing the SEC’s case against Debt Box. Grewal believes the SEC’s departure from its usual processes raises questions about the validity of its claims and possible abuse of power.

The post Ripple’s CTO David Schwartz Sheds Light on XRP Sales Strategy appeared first on Cryptonews.

Generated by Feedzy