Why Does Ripple Return Unlocked Tokens To Escrow? Pro-XRP Lawyer Provides Answers

Why Does Ripple Return Unlocked Tokens To Escrow? Pro-XRP Lawyer Provides Answers

Ripple usually returns a substantial part of its unlocked XRP tokens following every monthly release of 1 billion tokens from its escrow system. Justifying this move, pro-XRP legal expert Bill Morgan explained why Ripple does this rather than leaving these tokens in circulation.

Why Ripple Returns Some XRP Tokens To Escrow

In a tweet shared on his X (formerly Twitter) platform, Morgan suggested that Ripple’s decision not to sell most of the XRP released each month is one of the steps the firm takes to “support XRP’s price.” Morgan is likely referring to the fact Ripple selling all the 1 billion tokens could significantly affect (in a negative manner) the token’s price.

Morgan’s tweet came in response to another X user (Alter Diego), who suggested that Ripple wasn’t relocking those tokens of its own volition but because there was no demand for them. He mentioned that the crypto company’s inability to sell “even half of its monthly XRP escrow release” despite gaining clarity says a lot about the coin. 

The fact that Ripple doesn’t manage to sell even half of its monthly $XRP escrow release even after “having gained clarity” should tell you everything you need to know about this coin.

— Alter Diego (@elalterdiego) October 9, 2023

Another member of the XRP community noted that Ripple could sell all the tokens from its monthly release, and if they did, people like Diego would still complain that “they were dumping.” Meanwhile, he stated that most XRP sales from Ripple were made to “support the rails for new ODL networks which have to be primed.”

Diego’s claims that there is little or no demand for XRP seem unfounded, as XRP sales have jumped this year. Meanwhile, institutional investors seem to be taking a greater interest in the token as institutional inflows into the the token continue to spike. 

Ripple Has Lost Most Of Its Gains From ‘Second Victory’

In a prior tweet to the one where he explained why Ripple relocks its escrowed XRP tokens, Morgan noted that the token had lost most of its gains from Judge Analisa Torres’ denial of the US Securities and Exchange Commission (SEC) motion for an interlocutory appeal.

XRP had climbed as high as $0.6 following Judge Torres’ order. However, the token has dropped by over 2% since then to $0.49. However, despite the decline, many in the community are choosing to remain positive.

One particular X user (who happens to be a software developer) noted that XRP’s price wasn’t solely dependent on the court’s decision as its price “will go where the market takes it.” Irrespective, the user believes that the token’s value is growing as the network’s developers continue to build “incredible things daily.”