Ripple Labs CTO David Schwartz Explains Why the Company Has a Right to Sell XRP

Ripple Labs' chief technology officer (CTO), David Schwartz, said the company has a right to sell XRP tokens for operational funding.

The chief technology officer (CTO) of Ripple Labs, David Schwartz, has stated that the company has the right to sell its XRP tokens for operational funding and is not obliged to act in the interest of investors.

Schwartz’s remarks, which come just days after US President Donald Trump proposed adding the token to the planned national strategic crypto reserve, come in response to online critics who have been targeting XRP.

The discussion began with a statement by Pierre Rochard, vice president of research at Riot Platforms, who argued that XRP investors should not expect the company will put them first.

“XRP isn’t a security because Ripple doesn’t actually owe you ‘utility’ or anything else. They are free to dump on you, and you have no right to do anything about it other than join them in dumping XRP.”

Schwartz, who is known by his online alias “JoelKatz,” agreed with Rochard’s assessment.

“100% correct. IMO, Ripple can, will, and should act in its own interest.”

When further pressed by another user about Ripple’s obligations to its shareholders, the CTO replied that the company is privately held and thus is obligated to act in its shareholder’s interest.

“It’s a corporation. It has no obligation to act in the interest of anyone other than its shareholder. In the case of a private corporation, like Ripple, its shareholder is the corporation itself.”

Lasting impacts of crypto sleuth’s findings

The social media chatter comes two days after blockchain security sleuth ZachXBT revealed the existence of a dormant XRP wallet potentially linked to Ripple co-founder Chris Larsen. The wallet, which had been inactive for over six years, reportedly contains more than 2.7 billion XRP tokens, valued at approximately $7.18 billion.

On his Telegram channel, ZachXBT also noted that accounts tied to Larsen had transferred over $109 million worth of XRP to exchanges in January 2025. Some crypto community members believe Larsen may have lost access to the funds due to its dormancy, but the revelation has started a train of questions over Ripple’s control of XRP.

Here’s a chart to help clear it up. XRP owns about 45 billion of the 100 billion supply cap.

One user asked CTO Shwartz if Ripple’s best strategy was to sell XRP for immediate profit or to stay put in the crypto market for long-term viability. The user suggested that maintaining a stable price would allow the token to handle larger transactions more efficiently.

Schwartz answered by pointing to the company’s escrow system, which limits the amount of XRP that can be liquidated within a short period.

“Even if we didn’t want to, we have no choice but to be betting on the long-term health of the space. We have more XRP than we could possibly monetize in a short period of time, so there’s no way to avoid us being here for quite a bit longer.”

Music producer slams 'bland' response

Music producer and crypto commentator Jonnie King joined the conversation, throwing claims that Ripple’s control over XRP allows it to manipulate prices and mislead retail investors.

After Shwartz asked him what he found “interesting” in the XRP Ledger (XRPL), King made several allegations, including a theory about Ripple pre-mining 100% of XRP for insiders and dumping $1 billion worth of tokens onto the market each month.

The music artist also accused Ripple of political manoeuvering, claiming the company initially supported Kamala Harris’s election campaign before switching sides to Donald Trump after his victory.

“Paying influencers to spread fake news propaganda on a regular basis to pump the price and misguide retail. And don’t get me started on how Ripple donated heavily to Kamala’s campaign during the election and then only went on to donate to Trump’s AFTER he won. Seriously cannot believe you conned him into putting XRP into the Reserve.”

Schwartz refuted King’s accusations, stating that his statements were a collection of talking points that had no connection to the initial discussion.

“You made a nonsensical argument. I gave you a chance to defend it. You responded with a long list of talking points that had no connection to your original argument.”

I asked you what part of the tech interested you and you replied:

"It's a good question. I think a lot of people will be surprised to learn that the XRP Ledger is actually a very sophisticated piece of technology. It's capable of handling millions of transactions per second and it's extremely secure. But I think the most interesting thing about the XRP Ledger is that it's still under development. New features are being added all the time and the technology is constantly evolving."

But you're not actually interested in the tech. You're just trying to store up talking points to use in future arguments.

I’m not in the mood for this