Even the crypto world is not exempt from conspiracy theories, and precisely because of its decentralized and non-mainstream nature, these types of imaginative reconstructions, albeit with a grain of truth, often find fertile ground.
A very widespread and deep-rooted theory, for example, holds that Ripple releases XRP $XRP at regular intervals from its (Escrow) to crash the token's price.
The XRP escrow is an automated system created by Ripple in 2017 to gradually release tokens to the market and prevent supply that could affect their price. Each month, 1 billion XRP are released, but only a portion is used: the rest goes back into escrow.
Attorney Bill Morgan debunked this theory
The one who gave the final blow to this bizarre theory was lawyer Bill Morgan, a leading figure in the XRP community, who clarified once and for all the true function of the escrow mechanism.
Morgan noted that even the SEC has acknowledged that the escrow was designed to support the price, not depress it. The purpose? To ensure liquidity and stability, without causing market panic.
The criticisms, which resurfaced after the latest release of 1 billion XRP (in two tranches of 500 million), seem to ignore one obvious fact: the price of XRP rose from $0.50 to over $3.00, just as Ripple continued its monthly injections from its locked wallet.
Morgan had already clarified this in February 2025: the quantities released each month represent a small fraction of the daily traded volume, and over time, the percentage of XRP still held in escrow decreases. In practice, escrow becomes increasingly less important, and its impact increasingly marginal.
“ If a final blow was needed to bury the dump theory ,” Morgan writes on X, “ XRP’s rally from $0.50 to $3.00 provided it, despite the releases in November, December, and January .”
Morgan also clarified that rumors that the U.S. government might seize the escrow and use it as a national reserve are also unfounded. The lawyer's response was terse: "No. That won't happen."
So, how does Ripple escrow work?
In December 2017, Ripple decided to lock up 55 billion XRP (about 55% of the total supply at the time) in an automated escrow system.
The goal was twofold: to stabilize the market and reassure investors, avoiding a massive and sudden injection of tokens that could have led to price drops.
The mechanism is simple: 1 billion XRP are automatically unlocked every month . But Ripple isn't obligated to use them all. In fact, typically, between 200 and 350 million are used to fuel the liquidity needed for its products (such as ODL, On-Demand Liquidity) and support strategic partnerships through adoption incentives.
Unused tokens go back into escrow, effectively extending their future availability. This creates a predictable and transparent system: traders know when and how much supply may arrive each month, and can act accordingly.
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