XRP’s safe, for now; Ripple lawyer dismisses government seizure claims

Ripple’s legal counsel Bill Morgan has dismissed speculation that the U.S. government could seize XRP tokens from the company’s escrow accounts for national reserve purposes.

Morgan’s blunt “No it won’t” response countered analyst John Squire’s claims about potential government confiscation of Ripple’s XRP holdings.

Technical transfer mechanisms exist but face limitations

XRPL validator “Vet” outlined a theoretical mechanism for transferring escrowed XRP to government control without waiting for scheduled releases. The process would involve setting the regular key of XRP escrow accounts to a government-controlled address, enabling complete transfer through a single XRPL transaction.

However, Ripple senior software engineer Mayukha Vadari noted significant limitations with this approach. “Wouldn’t work if you only wanted to do a partial transfer, though — it’s an all-or-nothing solution,” Vadari explained, highlighting the inflexibility of the proposed mechanism.

SEC settlement process continues

Morgan has provided detailed updates on the SEC v. Ripple settlement negotiations, which began with Ripple signing an agreement on April 23, followed by SEC approval on May 8. The parties have successfully obtained court approval to hold appeals in abeyance through June 16.

The settlement process has encountered procedural complications. Judge Torres initially denied the parties’ first joint motion due to technical errors. A second joint motion addressing Rule 60 requirements was filed on June 12, seeking proper court approval for the settlement terms.

The agreed settlement reduces Ripple’s fine to $50 million and dissolves the injunction against XRP ( XRP ) sales. Upon completion, both the appeal and cross-appeal will be dismissed, ending the multi-year litigation.

Legal experts note that government seizure of cryptocurrency assets typically requires criminal conduct or national security threats. Ripple’s civil SEC case does not provide grounds for asset forfeiture, as the settlement acknowledges no criminal wrongdoing.

The company’s escrow structure, designed to provide market stability through controlled XRP releases, remains intact throughout the settlement process.

Ripple holds approximately 50 billion XRP in escrow accounts and releases up to 1 billion tokens monthly based on market conditions. This systematic approach has provided predictability for XRP markets and institutional users.