XRP dipped 4% as Ripple released $1.6 billion from escrow account which is a practice used to keep the prices steady as we can see more in our latest Ripple news.
This practice also limits the amount of XRP that can be released onto the market. Ripple labs unlocked 1 billion XRP from the escrow wallet today as per Whale Alert which is a service that tracks the movement of large amounts of crypto. XRP dipped 4% shortly after and it is now trading at $1.57 per token. By the law of supply and demand, more XRP in circulation means that less value will be recorded and today’s dip is to be expected.
Unlike other cryptocurrneices, one entity controls the majority of the global XRP supply. This is an entity is Ripple labs which is the payment company that was set up by XRP’s co-founders. To alleviate the fears that the price could one dump the treasure onto the market, it held in escrow 55% of the total supply of 100 billion tokens. Ripple labs kept 20 billion or 20% for the XRP Creators.
At the end of 2017, Ripple announced that it will release the coins it holds in escrow over the course of 55 months to control the price of the token. Ripple returns most of the xrp is released from escrow directly into the wallet and it returned 90% or 900 million coins to escrow. In December last year, Ripple was hit with a $1.3 billion lawsuits from the US SEC which alleged when the platform will start selling these tokens and distribute them as securities. That would be illegal since the SEC hasn’t given Ripple permission to sell securities.
After the suit was announced, the price dropped as in 2020, the price was worth 66 cents, but by New Year’s Eve it dropped to 23 cents. Ripple’s fortunes started changing at the start of last month when the company won a discovery motion to expose the SEC’s internal policies on BTC and ETH with Ripple’s lawyers are combining the documents In question to work out if the SEC acts with prejudice. Previously, the XRP creators won a ruling to stop the SEC from disclosing eight years worth of financial records from the Ripple CEO Brad Garlinghouse and Chris Larsen. Now, Ripple wants to court to dismiss the lawsuit.
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