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Ripple's David Schwartz defends XRP sale with $1.7M tax bill
The XRP Ledger co-creator disclosed a substantial capital gains tax payment to counter criticism over selling 2.5 million tokens.
Key takeaways
- Tax documentation. Schwartz publicly shared evidence of his capital gains tax obligation to substantiate his position on the XRP sale and rebut critics questioning his commitment to the project.
- Reduced holdings. His XRP position has fallen by approximately 92 percent from its peak, with some tokens transferred as gifts while the majority were sold on the open market over multiple years.
- Risk management strategy. Schwartz has described a deliberate approach of selling portions of holdings whenever investments reached new all-time highs, a practice he credits with reducing financial exposure and personal stress.
What happened
David Schwartz, the former chief technology officer and co-creator of the XRP Ledger, disclosed that he sold 2.5 million XRP tokens during 2025 while paying $1.7 million in capital gains taxes on the transaction. According to Cryptonews.com and U.Today, Schwartz made the disclosure to counter critics who questioned his commitment to XRP and suggested he was abandoning the project. Rather than dismissing the accusations privately, Schwartz publicly shared evidence of his tax obligation as proof of the transaction's legitimacy and scale.
Schwartz clarified that nearly all the tokens sold came from bonuses he received for his work at Ripple in 2020 and 2023. The revelation addressed a broader debate about insider motivations and signaling in the cryptocurrency community, where large token sales by project developers can trigger concerns about confidence levels. By documenting the financial consequences of his sale through tax records, Schwartz sought to demonstrate that his decision reflected a deliberate personal financial strategy rather than a loss of faith in the project itself.
The 2.5 million XRP sale represents a significant reduction in Schwartz's overall holdings. According to his own disclosures spanning from 2024 through 2026, his XRP position has contracted from approximately 26 million tokens at its peak to around 2 million tokens by August 2026. He acknowledged that some tokens went toward gifts and transfers to others, but confirmed that the majority were sold on the open market over an extended period.
First $1.40Latest $1.09-21.9% over the period
Points are daily observations, not closing prices.
Why it matters
Insider sales and holdings patterns carry significance in cryptocurrency communities where project developers and early contributors often command outsized influence over market narratives. When prominent figures reduce their token positions, observers frequently interpret these moves as signals about long-term conviction. By publicly documenting his tax obligation alongside his sale, Schwartz addressed concerns that would otherwise remain speculative, providing rare transparency about a Ripple insider's actual financial behavior and the scale of recent transactions.
The disclosure also highlights tensions between different approaches to cryptocurrency investment and wealth management. Schwartz's explicit strategy of taking profits stands in contrast to narratives in some cryptocurrency communities that celebrate indefinite holding periods. His willingness to discuss his discomfort with risk and his desire for financial security offers a contrasting perspective to more ideologically driven approaches to digital asset accumulation.
Background
Schwartz's selling history extends back many years and reflects a consistent approach to personal wealth management. He began taking profits when XRP traded around $0.10 per token and acknowledged that he never expected the cryptocurrency to break $0.25. His early exits from positions have given him perspective; he expressed regret about selling 40,000 ETH at approximately $1.05 per token, a decision he credits to his general discomfort with financial risk.
The developer has described an explicit strategy he and his wife followed over the years: selling a fixed portion of their holdings each time their investments reached new all-time highs. Schwartz explained that this approach allowed them to reduce exposure to volatility and achieve better sleep at night from a financial standpoint. He characterized himself as someone who "really, really hates risk" and does not align with narratives celebrating long-term holders who never take profits.
In more recent years, Schwartz has shifted his financial exposure away from cryptocurrency holdings. According to his disclosures, much of his remaining wealth has moved into Ripple company equity rather than XRP tokens. While Ripple shares are illiquid and not traded on open markets, this positioning reportedly gives him direct exposure to the company's business performance while insulating his personal capital from cryptocurrency price volatility.
What to watch
Beyond defending his recent sales, Schwartz recently made remarks during an X Spaces discussion suggesting he believes XRP could eventually surpass Bitcoin in market capitalization. He clarified that such a scenario would require XRP to grow faster rather than Bitcoin losing value, and he characterized the outcome as probably more likely than not without providing a specific timeline or price target. This statement adds nuance to the narrative around his token sales, indicating that despite reducing his personal holdings, he maintains views about XRP's long-term potential that remain bullish on the asset's future trajectory relative to Bitcoin.
Questions readers ask
Why did Schwartz sell 2.5 million XRP if he believes in the project?
Schwartz has explained that his sales reflect a deliberate personal financial strategy to manage risk and reduce volatility exposure rather than a loss of conviction. He and his wife follow a practice of selling portions of holdings when investments reach new all-time highs, which he credits with improving financial security and peace of mind. He has also shifted much of his remaining net worth into Ripple company equity.
How much XRP does Schwartz currently hold?
According to his disclosures, Schwartz held approximately 2 million XRP tokens as of August 2026, down from a peak of around 26 million tokens. This represents a 92 percent reduction in his holdings over several years, with some tokens given as gifts or transferred while the majority were sold.
What did Schwartz say about XRP's future compared to Bitcoin?
During an X Spaces discussion, Schwartz agreed that XRP could eventually surpass Bitcoin in market capitalization, characterizing such an outcome as probably more likely than not. He clarified that this would require XRP to grow faster rather than Bitcoin necessarily declining in value, and he provided no specific timeline or price target for such a scenario.
