Did Former Ripple CTO Sell 2.5M XRP? Tax Record Details

Introduction: A Surprising Disclosure from a Crypto Pioneer

Have you ever wondered what happens when a major crypto founder sells their tokens? Recently, David Schwartz shared details about his recent token sales.

Schwartz is the former Chief Technology Officer at RippleXRP-3.20%. He is also one of the original architects of the XRP Ledger.

His revelation came during a heated discussion on social media. It gave the community a rare look into his personal tax bills and financial strategy.

The Social Media Exchange: How the News Broke

The conversation started on X during a challenging week for the XRP market. A user claimed that XRP was a terrible investment.

The user added that nobody would blame Schwartz if he sold his tokens. Schwartz quickly replied with a surprising detail about his personal finances.

The $1.7 million I paid in capital gains tax says otherwise.

Schwartz explained that most of the XRP he sold in 2025 came from performance bonuses. Ripple paid him these bonuses for his work in 2020 and 2023.

His main point was simple. Massive tax bills only come from profitable investments, not losing ones.

Doing the Math: Estimating the Sale Price

Schwartz did not reveal the exact price at which he sold his 2.5 million XRP. However, crypto analysts quickly estimated his profits based on standard tax rates.

• Estimated Tax Rate: Federal long-term capital gains tax is 23.8% at his income level. California adds up to 13.3%, making a combined rate near 37%.
• Total Realized Profit: A $1.7 million tax bill at a 37% rate points to a gain of roughly $4.6 million.
• Initial Token Value: XRP traded below $0.30 in 2020 and between $0.40 and $0.60 in 2023. This puts the initial value of his bonus tokens between $500,000 and $1.5 million.
• Total Proceeds: Adding his estimated profit to the original cost basis gives total sales proceeds of $5 million to $6 million.

Dividing the proceeds by 2.5 million tokens gives an estimated average price between $2.00 and $2.40 per XRP if state tax applied.

If he paid no state tax, the sale price could be closer to $3.00. Overall, analysts estimate he sold within a range of $2.00 to $3.50 per XRP.

For context, XRP reached $3.65 in July 2025, which was its highest price point in seven years.

Past performance of digital assets is not an indication of future results. You can monitor current market conditions on Bitkub XRP Market.

A Long-Standing Selling Strategy: Managing Risk

There is no evidence suggesting this sale was based on confidential insider information. Schwartz has always been open about his personal financial rules.

Around 2012, Schwartz and his wife agreed on a personal rule. They decided to sell a portion of their crypto whenever prices hit new highs.

I really, really hate risk.

This cautious mindset has led him to sell assets during early market spikes throughout his career. Some notable past sales under this rule include:

• Selling BitcoinBTC-1.83% when it reached $750.
• Selling 40,000 Ether at approximately $1 per token.
• Starting to sell XRP when it traded around $0.10.

Schwartz has admitted that he regrets selling some assets so early, especially Bitcoin and EthereumETH-4.35%. However, his main goal was protecting his financial security.

How Much XRP Does David Schwartz Still Hold?

Despite selling 2.5 million XRP in 2025, Schwartz remains connected to the project, though his holdings have decreased over time.

• Past Balance: Schwartz once held approximately 26 million XRP.
• Current Balance: He currently holds around 2 million XRP.
• Main Investment: He views Ripple corporate stock, rather than the XRP token, as his primary bet in the industry.

Schwartz has stated that he prefers XRP's price to operate independently from Ripple's performance as a company.

Interestingly, he originally sold Bitcoin to purchase XRP. He has noted that XRP has made him more money overall than Bitcoin or Ethereum.

Why This Disclosure Matters to XRP Holders

The timing of this revelation came at a delicate moment for the community. XRP recently traded below $1.10, down about 70% from its record high.

When prices decline, token holders often question company leadership and commitment. Some critics may view insider token sales as a negative signal.

However, analyzing the situation provides a broader view of insider actions:

1. Disciplined Taking of Profits: The sale followed a 13-year personal risk management rule rather than a sudden change in sentiment.
2. Settling Tax Liabilities: Realizing capital gains generates significant tax bills that require cash payments to tax authorities.
3. Portfolio Balancing: Industry executives often hold stock in private companies alongside digital tokens to spread out financial risks.

Final Thoughts: Understanding Insider Sales Neutrally

Insider disclosures often spark debate across the crypto market. While some investors view token sales with concern, taking profits at market highs is a common risk management practice.

Understanding why executives sell can help market observers evaluate news objectively. Always ensure you conduct personal research before making financial decisions.