Many people are curious about XRP and its history with initial coin offerings (ICOs). Unlike many other cryptocurrencies, XRP did not have a public ICO where anyone could buy tokens at launch. Instead, the company behind XRP, Ripple, sold tokens privately to investors in several funding rounds.
Ripple raised hundreds of millions of dollars through these private sales. Over time, XRP has grown to have a significant market cap and is now one of the most well-known cryptocurrencies.
Did Ripple Really Hold an XRP ICO?
The question of whether Ripple held an initial coin offering (ICO) for XRP has been debated for years. Critics, including Custodia Bank CEO Caitlin Long, argue that Ripple’s early distribution of XRP resembled the structure of an ICO, pointing to the company’s large initial holdings and subsequent token sales to fund growth. They often compare this to Ethereum’s 2014 ICO, when ETH was sold directly to early investors in exchange for Bitcoin.
Ripple has consistently denied these claims. According to Chief Technology Officer David Schwartz, XRP was created all at once in a genesis ledger with a fixed supply of 100 billion tokens. No presale, contract, or promise of returns was offered to the public, and at launch the tokens had no market value.
Ripple says XRP was not sold as “future tokens,” but rather distributed gradually to employees, partners, charities, and institutions. Over time, XRP began trading on exchanges, where market forces established its value. Ripple also placed a large portion of its holdings into escrow to ensure transparent, scheduled releases.
XRP’s all time price action (Source: CoinMarketCap)
The distinction between XRP’s launch and ICOs is critical. Traditional ICOs functioned as fundraising events, where projects raised money by selling tokens at a set price. Ethereum’s ICO is a textbook case of this model. By contrast, Ripple did not hold a fundraising sale, did not establish a launch price, and did not raise capital directly from public investors. XRP’s supply was created upfront and distributed over time, with price discovery left to open markets.
Distribution, Validators, and the ICO Myth
The XRP Ledger was built with a fixed 100 billion supply, avoiding inflation through mining and ensuring that no more tokens would ever be created. While Ripple retained and distributed large portions of XRP, all movements have been publicly visible on the ledger. Tokens were allocated to team members, developers, institutions, and exchanges to drive adoption in payments and financial systems. This approach has drawn criticism for potential centralization, but supporters highlight its transparency.
Importantly, Ripple does not control the XRP Ledger. The network relies on a system of independent validators—more than 1,000 nodes operated by different entities worldwide. Consensus among validators is required for confirming transactions and approving protocol changes, meaning Ripple cannot unilaterally alter the system. This governance model further distances XRP from the structure of an ICO, where a single entity typically holds dominant control during and after the sale.
In the end, the claim that Ripple held an ICO does not align with the facts. There was no public fundraising event, XRP launched with zero market value, and its distribution was not tied to presale contracts or promises. While Ripple’s large holdings and sales of XRP remain controversial, the launch itself does not match the definition of an ICO.
Frequently Asked Questions
What are the initial coin offering regulations for XRP?
Government agencies have rules for how digital assets can be offered to the public. XRP did not follow a traditional initial coin offering (ICO) model. Ripple, the company behind XRP, has publicly stated they did not hold a standard ICO.
How does XRP's ICO differ from other cryptocurrency offerings?
Most cryptocurrencies raise money through ICOs, selling tokens directly to investors. XRP was created and then distributed by Ripple without a public ICO event. This sets XRP apart from projects like Ethereum or EOS, which had official ICOs.
What does the SEC say about Ripple's initial coin offering?
The United States Securities and Exchange Commission (SEC) has raised concerns about the way XRP was sold. The SEC argued that some XRP sales might count as unregistered securities offerings. Ripple disagrees with this viewpoint and has defended its actions in court.
Can XRP's initial coin offering be considered a form of investment?
Some buyers saw XRP as an investment, hoping its value would rise. However, since there was not an official ICO, the structure was different than many typical investments in new cryptocurrencies. This difference is a key point in legal debates about XRP.
