- David Schwartz’s comments aimed to clarify Ripple’s role in managing its XRP reserves, which sparked renewed debate on the firm’s influence over XRP’s value.
- Schwartz’s remarks highlight the firm’s ongoing legal battle with the SEC, which claims the firm was responsible for ensuring XRP investors’ financial gains.
Ripple Chief Technology Officer David Schwartz has spoken about the company’s role in holding XRP. He said that the company is under no compulsion to hold its XRP reserves. His statement comes in light of fresh debate over the role of the firm in distributing XRP and the effect it may have on the value of the token.
Ripple CTO Speaks Up On XRP Holdings
The debate was initiated by Bitcoin supporter and outspoken XRP critic, Pierre Rochard, who claimed that Ripple could sell its huge holdings of XRP without concern for its impact on investors. He proposed that this freedom of action reinforces the argument that XRP is not a security, in contrast to arguments that the firm must act in the best interest of token holders.
Schwartz concurred with this view, pointing out that Ripple acts just like any business, making moves that are beneficial to its strategy. Comparing it to the art world, he equated XRP holding to holding one of the earliest works of a budding artist. Even though the investor might be wishing for future value creation, the artist isn’t obligated to make that a reality. “There’s no expectation that Ripple or any company should act against its own interests just to serve investors,” Schwartz said.
Nonetheless, he assured the community that Ripple has been a long-established player within the crypto sector, holding considerable XRP reserves that it cannot sell hastily. This move has mitigated worries regarding an impulsive sell-off.
His statements reflect the company’s position in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), as highlighted in our previous article. The regulatory body, which filed a lawsuit against Ripple in December 2020, claims that the company was responsible for ensuring XRP investors benefited financially. However, the company has consistently denied this claim, arguing that it has no such obligation.
Debate Over Ripple’s Role In XRP Ecosystem
After Schwartz’s comments, a prominent Ripple critic, writing under the pseudonym “ScamDaddy,” brought attention to the debate on social media. According to him, Ripple’s prioritization of its business over XRP holders is not surprising and has always been the case.
Schwartz replied by reminding that much of the misinformation came from those who doggedly contend that XRP is a security. He accused the said group of consciously spreading misconceptions regarding Ripple’s relationship to XRP.
“It’s mostly the ‘XRP is a security’ crowd that deliberately created confusion about the relationship between Ripple and XRP,” Schwartz wrote on X. This fueled even more debate after XRPL validator “Vet” pointed out that most people who think that Ripple needs to keep its XRP also point out that the firm was culpable for minting the token. The disagreement over whether or not Ripple “issued” XRP has long been contentious.
In reply, “ScamDaddy” admitted that the meaning of “issued” is still controversial but insisted that founders developed both the XRP Ledger and the digital currency prior to its distribution. Vet, though, rebutted this assertion and highlighted that the XRP Ledger existed before Ripple as a corporate entity.
Earlier this week, David Schwartz highlighted how XRP’s price fluctuations impact numerous meme coins on the XRP Ledger (XRPL). These tokens, which rely heavily on automated market maker (AMM) liquidity pools, tend to mirror XRP’s price movements
