Ripple on the first day of every month routinely releases 1 billion XRP from its escrow as per its distribution model, and most of the released funds get locked back in the escrow. However, this time around instead of 1 billion XRP, the fintech firm released only 900 million and wired another 477 million XRP to its current CTO and co-founder Jed McCaleb as per their settlement deal.
McCaleb left Ripple back in 2013 owing to certain disagreements on how Ripple functions, and as a settlement Ripple promised him a total of 8 billion XRP which would be paid in parts to avoid any possibility of massive dumping on the market. McCaleb has earned in total $1.2 billion in profits and XRP tokens in the settlement deal.
Ripple end up withdrawing 1.3 billion in total at the start of 2021 instead of the usual 1 billion. The timing of the payout to its cofounder also raised eyebrows given the circumstances Ripple is currently in.
Ripple currently holds 6,365,030,048 XRP and it has distributed 45,425,790,652 XRP while 48,200,000,013 XRP is locked up in the escrow. The crypto company claims to use the XRP funds it holds for a range of operation maintenance cost, and to sell it to investors.
SEC Lawsuit Against Ripple Crashes XRP Market in the US
On December 21, SEC filed a security lawsuit against Ripple and two of its executives for the $1.3 billion sales in unregistered security in the form of XRP tokens. Ever since the SEC lawsuit, more than 10 crypto platforms especially those serving the US customers have announced the delisting of XRP from their platforms including the likes of Coinbase and Binance US, leading to an 80% market fall for XRP token.
XRP which has remained inactive for most of three years finally recorded massive rallies towards the end of November seeing its price climb up to $0.90, however it has lost all those gains and more due to the lawsuit and mass delisting across major exchanges.