Ripple legal counsel Bill Morgan formally refuted claims that the U.S. government could seize XRP from company escrow accounts for national reserve use.
Morgan’s direct response, “No, it won’t,” refuted analyst John Squire’s assertions regarding the potential government expropriation of Ripple’s XRP holdings.
Technical transmission mechanisms are present, but they are subject to constraints.
“Vet,” an XRPL validator, proposed a theoretical mechanism for transmitting escrowed XRP to government control without waiting for scheduled releases.
The procedure would entail the regular key of XRP escrow accounts being assigned to a government-controlled address, facilitating the complete transfer through a single XRPL transaction.
Nevertheless, Mayukha Vadari, a senior software engineer at Ripple, identified substantial constraints associated with this methodology.
Vadari emphasized the inflexibility of the proposed mechanism, stating that it would not be appropriate for a partial transfer as it is an all-or-nothing solution.
The SEC Settlement Procedure Is Ongoing
Morgan has provided comprehensive updates on the SEC v. Ripple settlement negotiations, which commenced with Ripple’s signature of an agreement on April 23 and were subsequently approved by the SEC on May 8. The parties have successfully obtained court approval to suspend appeals until June 16.
Procedural complications have arisen during the settlement procedure. Due to technical errors, Judge Torres denied the parties’ initial joint petition. The settlement terms were the subject of a second joint motion on June 12, which sought the appropriate court approval. The motion addressed Rule 60 requirements.
The injunction against XRP sales is dissolved, and Ripple’s punishment is reduced to $50 million due to the agreed settlement. The multi-year litigation will conclude with the dismissal of both the appeal and cross-appeal upon their completion.
Legal professionals have observed that the seizure of cryptocurrency assets by the government typically necessitates criminal activity or national security concerns. The settlement in Ripple’s civil SEC case does not establish a basis for asset forfeiture, as it does not acknowledge criminal misconduct.
The company’s escrow structure, which is intended to ensure market stability using controlled XRP releases, remains unaltered during the settlement process.
Based on market conditions, Ripple distributes up to 1 billion tokens monthly and maintains approximately 50 billion XRP in escrow accounts. This systematic approach has ensured predictability for institutional consumers and XRP markets.
