The Ripple CTO, David Schwartz, has clarified that the XRP escrow introduced in 2017 did not give Ripple more freedom to sell XRP.
According to him, the approach actually placed firm limits on how much the company could sell. Notably, he made this disclosure during a public exchange that started as a debate about wealth, taxes, and fairness.
The conversation started when a political satirical commentator reacted to remarks attributed to Elon Musk about paying over $10 billion in taxes. The commentator argued that although the figure sounded large, it represented only a small share of Musk’s overall wealth.
Ripple CTO Comments on Musk’s Tax Obligation
Using Musk’s estimated net worth of $700 billion, the political commentator calculated that $10 billion amounted to about 1.43%. They criticized what they believe is a system where extremely wealthy individuals can legally reduce their tax burden while most people pay a much higher share of their income.
Responding to the criticism, Schwartz acknowledged that while the calculation itself was correct, the reasoning behind it was flawed. However, an XRP investor shifted the conversation to the XRP ecosystem, suggesting that the Ripple CTO lacked standing in the debate.
According to him, Schwartz had helped put in place the Ripple escrow so the company could sell up to 1 billion XRP each month to fund its operations and careers within the firm.
The Escrow Limited Ripple’s Ability to Sell XRP
Meanwhile, Schwartz corrected this claim. He explained that before Ripple created the escrow, the company faced no formal limits on how much XRP it could sell in any given month.
Before the escrow, Ripple could have sold as much XRP as it wanted every month. And I opposed the decision to implement the escrow precisely because I didn't see enough upside to justify giving up that flexibility.
— David 'JoelKatz' Schwartz (@JoelKatz) December 25, 2025
According to him, the escrow actually reduced Ripple’s freedom by locking up most of its XRP and releasing it on a fixed schedule.
He added that he opposed the escrow when Ripple considered it, because he did not see enough benefit to justify giving up that flexibility. To him, the company traded away optionality, not control, when it agreed to the escrow structure.
The investor admitted that this was news to them but argued that XRP’s price would likely be much higher today if Ripple had not sold XRP regularly since 2017. Notably, this reflects a common belief among critics who argue that ongoing sales by Ripple have weighed on XRP’s market value.
However, Schwartz said this idea sounds reasonable on the surface, but the available evidence does not support it. He explained that markets usually account for events that everyone expects. Since investors have long known about Ripple’s scheduled XRP releases, the market should already reflect that information in the price.
To support his position, Schwartz presented price data comparing XRP with Stellar’s XLM. Specifically, both assets have moved largely in tandem over time, even though Stellar burned half of its total supply in 2019. The major supply reduction had absolutely no effect on XLM’s price.
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