Australian lawyer and digital assets enthusiast Bill Morgan flagged something unusual while reviewing a registration statement filed with the U.S. Securities and Exchange Commission (SEC) for
Australian lawyer and digital assets enthusiast Bill Morgan flagged something unusual while reviewing a registration statement filed with the U.S. Securities and Exchange Commission (SEC) for the Cryptex Digital Market Cap ETF.
The filing, submitted on Aug. 25, assigned XRP a portfolio weight of approximately 4.88%.
A registration statement filed with the SEC yesterday for Cryptex Digital Market Cap ETF provides a fund weight of 4.88% for $XRPI found this statement in the document interesting👇and had Grok reformat it to attach it.It cites that Ripple has indicated that if regulatory… pic.twitter.com/wU6Q39tldz
— bill morgan (@Belisarius2020) August 26, 2026
Inside the prospectus, Morgan found that Ripple has indicated it could release additional XRP from escrow to support on-ledger liquidity for stablecoin and foreign exchange trading pairs if the CLARITY Act is passed.
Note that the document doesn't represent an SEC finding or an announcement from Ripple.
Morgan posted on X that he could not recall Ripple making any such statement publicly before and questioned the source of the information cited in the prospectus.
"It cites that Ripple has indicated that if regulatory clarity is established by passage of the CLARITY Act it might release additional XRP from escrow to meet on-ledger liquidity in stablecoin and FX pairs. I do not recall any statement from Ripple to this effect and wonder what is the source of this information in the filing," he wrote in the post.
Related: XRP active addresses jump 655%, analyst warns of bigger moves
According to Ripple, the crypto firm created its escrow system in Dec 2017, locking 55 billion XRP into time-based smart contracts on the XRP Ledger.
Under the existing structure, up to 1 billion XRP is released on the first day of each month.
Ripple has historically re-locked between 60% and 80% of each monthly release back into new escrow contracts, resulting in a net increase in circulating supply of approximately 200 million to 400 million XRP per month.
The statement in the SEC filing suggests Ripple could retain a larger portion of future monthly releases rather than re-locking them if demand for XRP-based liquidity rises following regulatory changes, Morgan said.
"The company has indicated that, if regulatory clarity is established (e.g., via passage of the CLARITY Act), it may release additional XRP from escrow to support on-ledger liquidity in stablecoin and FX pairs," the filing mentions.
1 billion XRP is released every month. The issue is how much of this is distributed by Ripple and how much is returned to escrow. The statement in the filing is suggesting that ripple might return less to escrow each month and is currently doing. It is returning 700 million to…
— bill morgan (@Belisarius2020) August 26, 2026
Note that neither does the filing identify a Ripple representative or a source nor does it provide a link, a date, or other details.
TheStreet Roundtable reached out to Ripple for a response and did not receive a response by the time of publishing this report. We will update it once there is a response.
A sustained increase in circulating XRP supply could create downward pressure on price unless demand grows at a comparable pace.
The filing specifically links any potential increase to liquidity needs for stablecoin and forex transactions on the XRP Ledger, meaning additional tokens released would be tied to higher network activity rather than speculative selling.
XRP price at press time. Source: DecibelAccording to Decibel, XRP is trading at approximately $1.38 at the time of writing, down more than 6% over the past 24 hours but still 30% up on the weekly chart.
Related: Nearly 1 billion XRP just vanished from market, and Ripple had nothing to do with it
