Ripple's Escrow Reserves Spark Controversy Amid SEC Filing

Ripple's escrow reserves are under scrutiny after a recent SEC filing revealed a potentially crucial detail. The registration statement for the Cryptex Digital Market Cap ETF, filed on August 25, contains a line that has caught the attention of crypto lawyers and analysts.

Australian lawyer Bill Morgan flagged this detail while reviewing the ETF prospectus, which assigns XRP a portfolio weight near 4.88%. According to the filing, Ripple 'has indicated' it could release additional XRP from escrow to support on-ledger liquidity for stablecoin and foreign-exchange pairs, but only if the CLARITY Act passes.

This news has sparked questions about what Ripple may or may not have told regulators about its escrow reserves. The development comes as XRP trades near $1.40, down roughly -2.5% on the day, but still up over +27% in the past seven days.