As it is known, the case where the SEC accuses Ripple of selling securities unregistered has been going on for a long time.
The SEC claims that XRP is a security and that Ripple and its executives have sold $1.3 billion in unregistered securities since 2012.
One of the controversial issues in the case is the fate of XRP, which the cryptocurrency company Ripple keeps locked in escrow accounts. Ripple has set up a system where it releases 1 billion XRP from escrow every month to finance its operations and sell to third parties.
Unused XRPs are returned to escrow at the end of each month. As of January 2023, Ripple has approximately 47 billion XRP in escrow.
Can Ripple Burn XRP?
Some XRP holders and supporters have suggested that Ripple burn their escrow XRP to reduce the supply and increase the token price. However, some argued that Ripple cannot do this and neither the SEC nor the judge can force it to do so.
Matt Hamilton, a former Ripple executive and currently the director of developer relations at XRPL Labs, recently announced on Twitter that Ripple can technically burn its escrow XRP if it wishes. He said that the escrows are set to be sent to a specific address and that Ripple can disable the master key on the target account, rendering the account inoperable.
Hamilton stated that Ripple has the opportunity to burn:
“Escrows are set to be sent to a specific address. Ripple can disable the master key on the target account at any time. So this account becomes inoperable. So once the funds are out of escrow, they are inaccessible to anyone.”
The escrows are set to release to a particular address. Ripple could at any time disable the master key on the destination account. Thus rendering it inoperable. Ie when the funds released from escrow they’d be inaccessible to anyone.
— Matt Hamilton (@HammerToe) May 14, 2023
Hamilton's statement implies that Ripple has full control over its escrow XRPs and can decide to destroy them at will. However, it is unknown whether Ripple will actually do this or whether it will affect the outcome of the SEC case.
*Not investment advice.
