Following heightened scrutiny over the sales of the XRP tokens, Ripple’s Chief Technology Officer took to X (formerly called Twitter) to explain the firm’s strategy behind the token sales.
In his post, Schwartz outlined a hypothetical tax strategy to illustrate the necessity of the sales. He explained that if short-term capital gains losses became uncapped, users could potentially manipulate options positions. As such, they could convert ordinary income into long-term capital gains, resulting in significant tax savings.
Using this example to draw parallels to Ripple's approach with XRP sales, Schwartz emphasized that selling XRP is Ripple’s only viable method to access liquidity from its holdings. The company has not announced plans to significantly alter the volume of these sales. In another post, Schwartz acknowledged that earlier efforts to reduce XRP holdings through giveaways were unsuccessful. He also noted that although Ripple does not want to retain large amounts of XRP for decades, the firm could not find another alternative.
Schwartz made these statements shortly after Ripple published its Q1 2024 report. In the document, Ripple revealed its XRP holdings are categorized into liquid XRP, which is stored wallets, alongside XRP tokens that are locked in escrow accounts for 42 months.
Near the end of March, Ripple reportedly held 4.8B XRP tokens, with an additional 40.1B coins locked in escrow. Each month, a portion of the locked XRP assets is released, although most of it is returned to reset the escrow period.
