Speaking in a recent podcast episode with Versan Aljarrah, a crypto tax attorney shared how XRP holders could unlock liquidity without triggering capital gains tax.
Versan Aljarrah, co-founder of the Black Swan Capitalist, requested this information after he called attention to the prospect of long-term strategies in the crypto market during the latest podcast episode.
Specifically, Aljarrah noted that serious investors don’t just flip crypto assets for quick gains. Instead, they often plan to use their holdings in ways that preserve ownership while unlocking value.
According to him, assets like XRP could act as collateral once regulations are fully in place. He then asked how, from a legal and tax perspective, borrowing against crypto would work compared to selling it, especially for investors who want to access liquidity without triggering capital gains tax.
How to Access Liquidity with XRP Without Triggering Capital Tax
In response, Andrew Gordon, a CPA and crypto tax attorney, highlighted the tax implications. Gordon said that the most effective way to avoid a crypto tax bill is to avoid creating a taxable event in the first place. Any sale, swap from one token to another, or conversion into U.S. dollars counts as a taxable event.
Borrowing against $XRP collateral might be the smartest tax move in crypto. Top attorney Andrew Gordon explains why loans aren’t taxable, meaning you can unlock liquidity without triggering capital gains.
🔗 https://t.co/bWPNjFFA8y pic.twitter.com/nP3XAXEsXi
— Versan | Black Swan Capitalist (@VersanAljarrah) August 13, 2025
However, he explained that borrowing against crypto operates differently. If an investor uses Bitcoin, XRP, or another token as collateral for a loan, they can receive cash or other assets without selling the original holding.
Because no sale occurs, the IRS does not treat it as a capital gains event. This lets investors access funds while still holding their assets in anticipation of future price growth.
Nonetheless, Gordon cautioned that loans must be repaid and that each investor needs to evaluate whether the move makes financial sense. However, he called this a highly effective, tax-efficient way to unlock liquidity for those confident in the long-term growth of their crypto holdings.
Responding, Aljarrah confirmed that the explanation cleared up questions he had personally. Speaking further, he called attention to the growing prominence of the Ripple stablecoin, RLUSD. To him, once RLUSD infrastructure expands, the ability to borrow against XRP could present better upside opportunities for investors.
Interestingly, market commentator Cypress Demanincor proposed this move as part of the ideal investment strategy to investors. Demanincor suggested that instead of selling their XRP tokens, investors could lend out their tokens and borrow against them.
Moreover, wealth manager Digital Wealth Partner demonstrated this move early this year. Specifically, the firm announced that it had secured a seven-figure loan for one of its clients using XRP as collateral.
The Crypto Tax Situation in the US
The latest discussion comes during a period of major changes in U.S. crypto tax policy. On January 1, 2025, the IRS began requiring brokers to report crypto sales using the new Form 1099-DA, although cost basis reporting won’t begin until 2026.
The agency also replaced the universal accounting method with wallet-by-wallet accounting, forcing investors to track gains separately for each wallet. Last month, Fidelity urged Congress to fix the rules surrounding Bitcoin and crypto tax.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
