Ripple’s Legal Counsel Responds to Seizure Speculation
Bill Morgan, legal counsel for Ripple, has firmly rejected any speculation that the US government might confiscate the company’s escrow XRP tokens for national reserve purposes.
In response to analyst John Squire’s claims about the potential government takeover of Ripple’s XRP holdings, Morgan’s reaction was straightforward—just a blunt “no.”
Potential Mechanisms and Their Limitations
A validator on the XRPL, known as “VET,” discussed a theoretical way for the government to gain control of escrowed XRP without waiting for a scheduled release. This method involves adjusting the periodic key of the XRP escrow account to direct it to a government-controlled address, enabling complete transfers in a single transaction on the XRPL.
However, Mayukha Vadari, a senior software engineer at Ripple, noted a significant issue with this process. “It won’t work if you only want to make partial transfers. It’s all or nothing,” Vadari asserted, highlighting the constraints of this theoretical mechanism.
Progress in the SEC Payment Process
The legal battle began with Morgan signing a contract on April 23rd and receiving SEC approval by May 8th. Updates on Ripple’s settlement negotiations have been provided, including that court approval for the appeal has been scheduled until June 16th.
The settlement process faced some procedural hiccups. Judge Torres denied the parties’ first joint motion due to technical mistakes. A second joint motion was filed on June 12th to address the requirements of Rule 60, seeking proper court approval for the settlement’s terms.
If the settlement proceeds, Ripple’s fine would be reduced to $50 million, and the injunction on XRP sales would be lifted. Upon completion, both the appeal and cross-appeal will be dismissed, effectively ending the long-standing lawsuit.
Legal experts emphasize that any government seizure of cryptocurrency typically necessitates evidence of criminal activity or threats to national security. Since Ripple’s civil case with the SEC doesn’t indicate any criminal wrongdoing, it doesn’t support a basis for asset forfeiture.
Throughout the settlement proceedings, Ripple’s escrow structure, aimed at maintaining market stability through regulated XRP releases, remains unchanged.
Currently, Ripple holds around 50 billion XRP in its escrow account, releasing up to 1 billion tokens each month depending on market conditions. This systematic approach provides predictability for both the XRP market and its institutional users.
