Ripple's XRP Escrow: Lawyer Debunks Dump Theory, Highlights Efforts
XRP Escrow Management Under Scrutiny
The debate around Ripple’s XRP escrow mechanism has been reignited, with critics alleging that the company intentionally suppresses the token's price. Bill Morgan, an attorney specializing in XRP, has stepped in to challenge this assertion, shedding light on Ripple's token management strategy and its commitment to the XRP ecosystem.
Morgan referenced the SEC’s acknowledgment of Ripple's motives, stating in an X post, "Even the SEC recognised that the escrow was intended to buttress the price of XRP not deflate it.” He noted that the SEC viewed the escrow mechanism as a factor influencing investors' expectations of profit from Ripple's initiatives, further discrediting the 'escrow dump' theory.
This discussion follows Ripple's July escrow release, where 1 billion tokens were unlocked in two tranches of 500 million each.
Criticism Persists Despite Market Performance
Despite positive market sentiment and XRP's price increase from $0.50 to over $3, Ripple continues to face criticism regarding its monthly escrow releases. Detractors claim these releases are strategically timed to trigger price drops.
In February 2025, Morgan addressed this misconception, pointing out that the monthly XRP releases constitute only a small portion of the daily trading volume. He added that as the total XRP supply increases, the proportion of tokens held in escrow decreases, mitigating any adverse effects on XRP's price. The lawyer's original argument was that there is no correlation between XRP escrow releases and token performance.
What is there to say about the discredited escrow dump theory that has not already been said. If it needed a coup de grace to send it to its final resting place, it was the massive rise in XRP price from $0.50 to over $3.00 despite further releases of XRP by Ripple from escrow in… https://t.co/cqTcjR4k2N
— bill morgan (@Belisarius2020) February 27, 2025
In June, Morgan refuted rumors about the U.S. government seizing the escrow for national reserves, firmly stating, "No, it won’t.”
Understanding Ripple’s XRP Escrow
Ripple established its escrow system in 2017, locking 55 billion XRP to foster market stability and prevent token oversaturation. The platform releases 1 billion tokens monthly, utilizing only a fraction (typically 200-350 million) to support payment services and ecosystem initiatives.
Unused tokens are returned to escrow, balancing supply and demand. This system aims to provide liquidity for practical applications while mitigating downward price pressure.
At Codeum, we understand the importance of secure and transparent token management. Our services, including smart contract audits and tokenomics consultation, help blockchain projects like Ripple maintain the integrity and stability of their ecosystems.