Ripple Labs has unlocked 1 billion XRP (equivalent to $ 1.6 billion) from its escrow wallet today, according to Whale Alert, a service that tracks the movement of large amounts of cryptocurrencies.
— Whale Alert (@whale_alert) May 1, 2021
The price of XRP also fell 4.21% compared to yesterday and is currently trading at $ 1.55 per token. According to the law of supply and demand, more XRP in circulation means less value of the token. So perhaps the slight decline of today was expected.
Unlike other cryptocurrencies, a single asset controls most of the XRP supply. This entity is Ripple Labs, the payment company created by the founders of XRP. It is keeping 55% of its token supply, which is a total of $ 100 billion, in custody to alleviate the fear that one day the market might “dump” all of its treasure into the market. Ripple Labs holds 20 billion – 20% of the supply for XRP’s creators.
At the end of 2017, Ripple announced that it will release XRP, which it has held in escrow for 55 months, to control the token price. Ripple usually returns most of the XRP it dumped into an escrow wallet. Last month, it returned 90% (900 million) XRP tokens to escrow.
Ripple is on the agenda with SEC case
In December last year, Ripple was hit by a $ 1.3 billion lawsuit filed by the US Securities and Exchange Commission. The SEC claimed that Ripple distributed these tokens as securities. According to the regulator, this is illegal as Ripple is not permitted to sell securities.
After the announcement of the case, the price of XRP hit bottom. On December 17, 2020, XRP was worth 66 cents. It dropped to 23 cents on New Year’s Eve.
Therefore, despite being brought to the brink of destruction, XRP is struggling. It maintains its position as the fourth largest cryptocurrency by market cap.