Ripple CTO Shuts Down XRP “Dumping” Claims, Explains Why Escrow Actually Limited Sales

Ripple Chief Technology Officer David Schwartz has publicly addressed renewed accusations surrounding Ripple’s XRP sales, clarifying that the creation of the Ripple escrow system actually restricted, rather than enabled, large-scale XRP sales. His comments came in response to a social media claim alleging that the escrow was designed to systematically dump 1 billion XRP into the market each month to fund executives’ careers at the expense of retail investors.

The discussion began with Schwartz correcting a common misconception about billionaire taxation, sparked by a defense of Elon Musk. Critics argued Musk’s effective tax rate appeared extremely low because they compared his tax payments to his total net worth. Schwartz pointed out that taxes apply to income and realized gains, not unrealized wealth. If stock is not sold, it is not considered taxable income, meaning unrealized gains cannot be treated like cash in a bank account.

The conversation later pivoted to Ripple and XRP sales, where Schwartz revealed an often-overlooked historical detail. In 2017, Ripple placed 55 billion XRP into escrow contracts that released up to 1 billion XRP per month. This move was marketed as a way to create transparency, predictability, and trust in XRP’s supply dynamics. However, Schwartz emphasized that the escrow was a self-imposed limitation. Prior to its establishment, Ripple had unrestricted access to its XRP holdings and could have sold significantly more than 1 billion XRP per month if it had chosen to do so.

In a surprising admission, Schwartz disclosed that he actually voted against implementing the escrow. His concern was not about sales volume but about operational flexibility. He believed the restriction reduced Ripple’s ability to freely access its own capital, and that the perceived benefits did not outweigh the loss of flexibility.

Schwartz also addressed ongoing concerns about XRP price impact, noting that markets typically price in all known and expected future events. According to him, the scheduled escrow releases are already reflected in XRP’s current market value, undermining claims of sudden or hidden dilution.

Overall, Schwartz’s comments challenge the narrative that Ripple’s escrow exists to facilitate XRP dumping, instead framing it as a mechanism that significantly curtailed Ripple’s ability to sell its own holdings.