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Ripple CTO Says XRP Escrow Limited Sales, Not Enabled Monthly Dumping
Ripple CTO David Schwartz – A recent social media exchange has reignited debate around Ripple, XRP, and the company’s long-standing escrow system, after Ripple CTO David Schwartz addressed claims that the mechanism was designed to systematically sell tokens at the expense of retail investors.
A Claim Sparks a Wider Debate
The discussion began unexpectedly with Schwartz correcting a misconception about billionaire taxation, prompted by criticism of Elon Musk’s effective tax rate. Schwartz explained that taxes apply to income or assets sold—not to unrealized wealth. In his words, if stock is not sold, it is not considered taxable income, underscoring why unrealized gains cannot be treated like cash holdings.
From there, the conversation pivoted sharply toward Ripple.
Escrow Was a Limitation, Not a Dumping Tool
A user accused Schwartz of creating the Ripple Escrow system to “dump” 1 billion XRP every month in order to fund his career. Schwartz firmly rejected the claim, clarifying that the escrow actually restricted Ripple’s ability to sell XRP, rather than enabling it.
According to Schwartz, before the escrow was introduced, Ripple had full access to its XRP holdings and could have sold more than 1 billion XRP per month if it wanted. In 2017, Ripple locked 55 billion XRP into escrow, releasing up to 1 billion XRP monthly to introduce predictability and transparency for the market.
Why Schwartz Voted Against the Escrow
In a surprising revelation, Schwartz disclosed that he voted against implementing the escrow system. His reasoning was rooted in operational philosophy: he valued flexibility and believed the downside—losing unrestricted access to capital—outweighed the perceived benefits. This directly contradicts the common narrative that Ripple executives favored the escrow structure.
Market Expectations Already Priced In
Schwartz also noted that the market has long been aware of XRP’s escrow releases. As a result, he believes current XRP prices already reflect those future sales, arguing that known and expected events are typically incorporated into market valuations.
The comments offer rare insight into the internal thinking behind one of crypto’s most discussed supply mechanisms—challenging long-held assumptions about Ripple’s intentions and XRP’s market dynamics.
