Ripple Labs Locks 700M XRP in Escrow as Part of Its Strategy to Manage the Cryptocurrency's Supply

Blockchain payments firm Ripple Labs Inc has locked 700 million XRP as part of its continued strategy to manage the cryptocurrency's supply. By Benjamin Godfrey.

Key Notes

Blockchain payments firm Ripple Labs Inc (NYSE:PYPL) has locked 700 million XRP (CRYPTO: XRP) in escrow as part of its ongoing strategy to manage the cryptocurrency’s supply. This move comes several weeks after the company’s CEO, Brad Garlinghouse, disclosed the settlement of its lawsuit with the US Securities and Exchange Commission (SEC).

It is worth noting that Ripple Labs has a structured escrow program to control the availability of XRP in the market. The company routinely releases 1 billion XRP each month, which is used for institutional sales, liquidity support, and operational expenses.

However, previous trends show that a portion of these tokens are returned to escrow to maintain a stable supply and prevent excessive market fluctuations.

According to data from Whale Alert, Ripple Labs returned 700 million XRP to escrow last month without completing the scheduled 1 billion token release. As highlighted by digital asset analyst Leonidas Hadjiloizou, this action was possible due to a surplus of XRP in the company’s accounts.

Annually, 1 billion XRP is released from escrow to be used by Ripple for institutional sales, liquidity support and operational expenses. However, in April 2025, no new tokens were sold, and some were returned to escrow.

This was made possible because there was an excess of XRP in Ripple’s account, allowing them to lock more tokens in escrow despite the planned billion tokens to be released.

At present, the remaining tranches of XRP are funded by institutional sales.

Further, Hadjiloizou disclosed that Ripple Labs still holds several billion XRP in its primary accounts, granting the company strategic control over the token’s deployment.

The decision to lock funds rather than immediately release them could have implications for the XRP market. Recent updates highlight that Garlinghouse confirmed plans to scale back the company’s XRP sales.

Many analysts believe that such a move could alleviate selling pressure and potentially foster a more favorable pricing environment for the coin.

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Still, Ripple’s control over XRP remains a major discourse in the crypto industry. The company still holds more than 40% of the total XRP supply, making its decisions crucial to the coin’s overall outlook.

Investors and analysts are closely monitoring Ripple’s strategies to gauge the potential impact on price movements. As of press time, XRP is trading at $2.121, registering a 2.42% price decline in the past 24 hours.

The Latest

The latest escrow move comes after a major development in the legal battle between Ripple Labs and the SEC.

Earlier this year, a US court ruled that XRP sales on public exchanges were not subject to registration requirements, although institutional sales required compliance with relevant regulations.

However, the security agency filed an appeal in January 2025, asserting that Ripple's cryptocurrency promotions were designed to generate profit expectations from investors. This, the SEC argued, rendered the retail sales an unregistered securities offering, applying the "Howey Test."

But with President Donald Trump making a shift toward crypto, the SEC dropped the appeal and closed the case.

As part of the settlement, Ripple agreed to pay $50 million of the previously imposed $150 million fine for the institutional XRP sales violation. The cryptocurrency firm will also contribute an additional $30 million to settle the SEC’s claims.

The case, which began in 2020, had a significant impact on the crypto industry. It raised questions about the application of securities laws to cryptocurrencies and the role of the SEC in regulating the nascent industry.

The case also highlighted the complexities of cryptocurrency regulation in a rapidly evolving technological landscape.