Ripple Rejects Confiscation Rumors
Bill Morgan, legal representative for Ripple, has categorically rejected rumors suggesting that the U.S. government might confiscate XRP tokens from the company’s escrow for use in national reserves. His succinct rebuttal was in response to analyst John Squire‘s assertions regarding the feasibility of such a government action. Morgan emphasized with a decisive,
No it won’t.
discarding the notion of government seizure.
Speculation on Government Control of XRP
The speculation included a theoretical framework from a validator known as “Vet”, who proposed a method to transfer control of escrowed XRP to a government address, circumventing the typical release schedule. This mechanism would permit a government-controlled transfer in one swift XRPL transaction.
Despite the intriguing proposal, Ripple‘s senior software engineer, Mayukha Vadari, pointed out significant drawbacks, calling the process impractical.
It wouldn’t function for partial transfers, as it’s an all-or-nothing solution.
She noted, stressing the limitations of the suggested approach, given that all XRP accounts cannot simply shift to a singular government address. Instead, the system consists of numerous accounts possessing various escrows.
Legal Proceedings and Settlement Updates
In the context of legal proceedings, Morgan has been actively updating on the negotiations surrounding Ripple’s settlement with the SEC. The dialogue commenced after Ripple signed a preliminary agreement on April 23, which the SEC subsequently approved on May 8. They have sought and obtained court clearance to suspend appeals until June 16, facilitating their discussions.
However, there have been procedural hurdles. Initially, Judge Torres rejected their first joint motion due to technicalities. A subsequent filing that addressed the necessary Rule 60 criteria was submitted on June 12, aspiring to advance the settlement terms through the court.
Impact of the Settlement
The eventual settlement is set to significantly reduce Ripple’s financial penalty to $50 million, while also lifting a previously imposed injunction against XRP sales. Once this process is finalized, all pending appeals will be dismissed, bringing a close to a protracted legal battle that has lasted several years.
Legal Context on Asset Seizure
Legal practitioners highlight that the government typically requires evidence of criminal conduct, national security concerns, or similar issues to initiate cryptocurrency asset seizure. Given that Ripple’s SEC case is classified as civil, it does not substantiate grounds for confiscating assets, particularly as the settlement does not imply any admission of wrongdoing by Ripple.
Ripple’s Escrow Mechanism
Throughout these proceedings, Ripple’s escrow framework, which aims to stabilize the market by controlling XRP releases, continues to operate effectively. Currently, the company holds around 50 billion XRP in escrow accounts, with monthly releases capped at 1 billion tokens, depending on existing market conditions. This approach has assured institutional users and market participants with a level of predictability in their transactions involving XRP.
