In a series of three transactions, Ripple Labs Inc unlocked a total of one billion XRP coins from escrow. The data insights from Whale Alerts show that the first transaction happened at 12:00 a.m. (UTC), releasing 300 million XRP tokens.
— Whale Alert (@whale_alert) June 1, 2023
The firm unlocked three batches of XRP tokens from its escrow accounts, totaling 900 million XRP. The first batch contained 200 million XRP, the second batch had another 200 million XRP, and the third batch had the largest amount of 500 million XRP. This was a planned business decision to increase the availability of cryptocurrency in the market.
The escrow accounts that hold XRP were created in 2017 with a specific plan to distribute the token slowly every month to avoid lowering its price. According to the plan, one billion tokens would be unlocked every month for 55 months. The final batch is expected to be unlocked by December 2023.
The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) hinges largely on the relationship between the company and the XRP coin. The SEC alleges that Ripple Labs sold XRP as an unregistered security, while the company argues that XRP is a decentralized cryptocurrency that is not under its control.
Unlocked Escrow Influence on the Price
The price of XRP has shown little impact from the latest release of escrow funds. The cryptocurrency is currently trading at $0.4819, a slight decrease of 0.12% in the last day.
As most of the leading cryptocurrencies are showing signs of a price rebound, XRP is facing a downward trend. However, this may not last long, as XRP could benefit from the positive market sentiment and change its direction soon.
Instead of viewing the XRP distribution as a challenge, it could also be an opportunity to accumulate more of the asset for the future. This is because the XRP supply may increase the liquidity and demand of the market in the short term.