XRP explained: Ripple vs the XRP Ledger, the SEC case and how XRP CFDs work

XRP is the native cryptocurrency of the XRP Ledger, a public blockchain that has been running since 2012 and is designed for fast, low-cost payments. Ripple is a private company, founded by some of the ledger's early developers, that builds payment products around it and holds a large share of the XRP supply. The two are often used interchangeably in headlines, but they are not the same thing: the ledger is open-source software run by independent validators, while Ripple is a business with its own interests.

This guide explains how the XRP Ledger works, how XRP's supply and Ripple's escrow function, what the US Securities and Exchange Commission (SEC) lawsuit against Ripple decided, and how XRP CFDs are margined and sized. For crypto basics, start with what is cryptocurrency.

Risk first. XRP is a highly volatile crypto-asset and has fallen by large amounts in past downturns and on legal news. You can lose all of the money you put in. Leveraged products such as CFDs magnify losses, and most retail CFD accounts lose money.

Ripple, the XRP Ledger and XRP: three different things

• The XRP Ledger (XRPL) is a public blockchain. Anyone can run a server that follows it, and anyone can build applications on it. It has a built-in decentralised exchange and supports issued tokens and, more recently, other features added by amendment.
• XRP is the ledger's native coin. It pays the small transaction fees and is required as a minimum reserve for every account, which deters spam.
• Ripple is a company. It sells payment and custody products to financial institutions, some of which use XRP as a bridge currency, and it has historically sold XRP to fund its operations.

The ledger would keep running without Ripple, but Ripple's decisions, sales of XRP and legal position have had a large effect on the coin's price. That concentration is a risk in its own right.

How the XRP Ledger reaches agreement

The XRP Ledger does not use mining (proof of work) or staking (proof of stake). Instead it uses a consensus protocol in which validator servers vote on which transactions to include in each new ledger version. Each server operator chooses a list of validators it trusts not to collude, called a Unique Node List. A ledger version is confirmed when a supermajority of trusted validators agree. Many servers use a recommended default list published by organisations in the XRP community.

The practical results:

• Speed. New ledger versions close every few seconds, and transactions settle with finality, with no waiting for further block confirmations.
• Low fees. The minimum fee is a tiny fraction of an XRP, and it rises only when the network is under load.
• Low energy use. There is no mining.

The main criticism is about who validates. Because most servers rely on similar recommended lists, critics argue the validator set is effectively curated, which makes the network more centralised than Bitcoin. Supporters reply that the lists are public, can be changed by any operator, and that Ripple runs only a small fraction of the validators on them. Our guide to proof of work vs proof of stake explains the more common security models for comparison.

XRP supply and the escrow

A fixed supply, created at launch

All 100 billion XRP were created when the ledger launched in 2012. No new XRP can be issued: there are no mining rewards or staking rewards. Transaction fees are destroyed rather than paid to validators, so the total supply falls very slowly over time, although the amount burned has been small relative to the total.

At launch a large portion of the supply was given to the company that became Ripple, with the rest going to its founders. That is why Ripple has always been one of the largest holders.

The escrow

In December 2017 Ripple locked 55 billion XRP into escrow contracts on the ledger itself, set up so that 1 billion XRP becomes available to Ripple at the start of each month. Ripple has said the aim was to make its supply more predictable. In practice, Ripple has usually sold or used only part of each monthly release and placed the rest back into new escrow contracts that unlock further in the future.

For anyone reading XRP's supply, this means:

• The circulating supply is lower than the total, because escrowed XRP is excluded from most circulating figures.
• The escrow creates a known, regular source of potential selling.
• Ripple's sales and the amount it re-escrows each month are public on the ledger and are also discussed in Ripple's periodic market reports.

Our guide to tokenomics and token supply explains how unlocks and releases affect any token, and crypto market cap and dominance shows why circulating supply matters for headline valuations.

The SEC case: what was decided

The lawsuit is the most significant event in XRP's history, so it is worth setting out exactly what was decided.

The claim

In December 2020 the SEC sued Ripple and two of its executives, Brad Garlinghouse and Chris Larsen, alleging that Ripple's sales of XRP since 2013 had been unregistered securities offerings. Several US exchanges suspended or delisted XRP trading after the case was filed, and the price fell sharply.

The July 2023 ruling

On 13 July 2023 Judge Analisa Torres of the US District Court for the Southern District of New York issued a split decision:

• Ripple's direct sales of XRP to institutional buyers under written contracts were investment contracts, and therefore unregistered securities offerings.
• Ripple's programmatic sales on public exchanges, where buyers did not know they were buying from Ripple, were not.
• Distributions of XRP to employees and others as payment were not securities offerings either.

The ruling was about Ripple's conduct in particular sales. It did not declare XRP itself to be or not to be a security in every context. Several US exchanges relisted XRP after the decision.

Penalty and the end of the case

In August 2024 the court ordered Ripple to pay a civil penalty of about 125 million dollars, far less than the SEC had sought, and imposed an injunction on future institutional sales that breached securities law. Both sides then appealed.

In 2025 the SEC and Ripple sought to settle, including a proposal to reduce the penalty, which the judge declined. In August 2025 both parties dismissed their appeals, ending the case. The 2023 ruling, the roughly 125 million dollar penalty and the injunction on institutional sales remained in place.

What the case means for traders

Two lessons stand out. First, a single legal event can move a coin's price by large amounts within minutes, in either direction, and gaps around such news can be severe. Second, the outcome applied to a US case about one company's sales. Regulation of crypto-assets varies by jurisdiction; in the EU, the Markets in Crypto-Assets Regulation (MiCA) sets separate rules, explained in our MiCA guide.

How XRP is meant to be used in payments

Ripple's original pitch for XRP was as a "bridge currency" for cross-border payments. The idea works like this: a payment provider in one country converts local currency into XRP, sends the XRP across the ledger in seconds, and a provider in the destination country converts it into the local currency there. In principle this removes the need for banks to keep pre-funded accounts in many currencies around the world, money that sits idle waiting to cover payments.

In practice, several things limit how much this use affects XRP's price:

• Holding time is short. In a bridge payment XRP is held for seconds. That creates trading volume but not long-term demand to hold the coin.
• Many Ripple customers do not use XRP. Ripple sells messaging and settlement software that works without the coin, and announcements do not always say which product a partner uses.
• Liquidity is needed at both ends. The model depends on deep XRP markets against each local currency, which exist for some currency pairs and not others.

The XRP Ledger also has features beyond payments. It has had a built-in decentralised exchange since its early years, lets anyone issue tokens representing other assets (including stablecoins), and has added further features through an amendment process in which validators vote on changes. Usage of these features varies widely and can be checked on public ledger explorers.

What moves XRP

The following have historically been associated with large moves. None of this is a guide to future direction.

• Legal and regulatory news, above all the SEC case, as described above.
• Ripple announcements, such as partnerships or products, though the link between a partnership and actual use of XRP is often weaker than headlines suggest. Many institutions use Ripple's messaging software without using XRP.
• Broad crypto market moves. XRP has tended to fall with bitcoin in sell-offs, often by more.
• Exchange listings and delistings, which change who can easily trade it.
• Large holder and escrow activity, which is visible on the ledger and widely watched.

How XRP CFDs work

An XRP CFD is a contract with a broker that pays the difference between the opening and closing price of XRP, multiplied by your position size. You do not own any XRP, cannot send it and are not exposed to the custody risks of holding it, but you are exposed to the broker as counterparty and to its pricing. Our comparison of crypto CFDs vs buying crypto sets out the differences in full.

For retail clients of EU-regulated brokers, ESMA caps leverage on crypto CFDs at 2:1, so margin is at least half the exposure. Retail clients in the UK cannot be sold crypto derivatives.

XRP's unit price has historically been low enough that it is quoted to four or five decimal places. Brokers differ in contract size (one CFD may be 1 XRP, 100 XRP or more) and in how they define a point or pip on the price. Check the specification, because the same "1 lot" can be very different exposure on two platforms.

Worked example: exposure and a 20% fall

Illustrative numbers only. XRP is quoted at 0.6000 dollars and you buy a CFD on 5,000 XRP.

• Exposure: 5,000 × 0.6000 = 3,000 dollars.
• Margin at 2:1: 1,500 dollars.
• A 20% fall to 0.4800 dollars costs 5,000 × 0.1200 = 600 dollars, which is 40% of the margin, before spread and financing.

Moves of that size have happened on single days of legal news. Our guide to crypto volatility and risk covers how such moves interact with margin close-out.

Worked example: sizing from a stop

Illustrative numbers only. Your account holds 8,000 dollars and you decide to risk at most 1% (80 dollars). You buy XRP at 0.6000 with a stop at 0.5650, 0.0350 away.

• Position size: 80 ÷ 0.0350 = 2,285.7 XRP, rounded down to 2,285 XRP (or down to the broker's minimum increment).
• Exposure: 2,285 × 0.6000 = 1,371 dollars. Margin at 2:1: 685.50 dollars.
• Loss if the stop fills exactly: 2,285 × 0.0350 = about 79.98 dollars.

A gap through the stop on legal or market news could make the loss larger. The crypto position size calculator and crypto margin calculator handle the arithmetic.

Financing and hours

Holding an XRP CFD overnight usually incurs a financing charge, often on both long and short positions and often every night including weekends. See crypto CFD overnight fees for how to calculate the cost. XRP itself trades around the clock, but some brokers pause crypto CFDs at certain hours or at weekends, which can lead to gaps when trading resumes.

Common mistakes

• Treating Ripple and XRP as one thing. Ripple's business success does not automatically translate into demand for XRP.
• Over-reading partnership announcements. Many concern Ripple's software, not use of the coin.
• Misstating the court ruling. It did not decide that XRP is "not a security" in every context; it distinguished between types of sale.
• Ignoring the escrow. Monthly releases are a known source of supply.
• Being misled by the low unit price. A coin under one dollar is not "cheap"; with tens of billions in circulation its market cap has been among the largest in crypto.
• Sizing from margin rather than from the stop. At 2:1, normal XRP moves can consume a large share of margin quickly.

Frequently asked questions

Is XRP the same as Ripple?

No. XRP is the native coin of the XRP Ledger, an open-source public blockchain. Ripple is a private company that builds products around the ledger and holds a large amount of XRP. The ledger would continue running without Ripple.

How many XRP are there?

100 billion XRP were created when the ledger launched in 2012, and no more can be created. A small amount is destroyed with every transaction fee, so total supply declines very slowly. A significant amount is held by Ripple, much of it in escrow.

What did the court decide in the SEC v Ripple case?

In July 2023 the court ruled that Ripple's direct sales of XRP to institutional investors were unregistered securities offerings, while its programmatic sales on public exchanges were not. Ripple was later ordered to pay a civil penalty of about 125 million dollars. Both sides dismissed their appeals in August 2025, which ended the case with that judgment in place.

Does XRP use mining or staking?

Neither. The XRP Ledger uses a consensus protocol in which trusted validators vote on each new ledger version. There are no block rewards, and fees are destroyed rather than paid to validators.

What leverage can I use on XRP CFDs?

Retail clients of EU-regulated brokers are limited to 2:1 on all crypto CFDs, which means at least 50% margin. Retail clients in the UK cannot be sold crypto derivatives at all.

Why does XRP have so many decimal places?

Its unit price has historically been low, often under one dollar, so prices are quoted to four or five decimals to show meaningful changes. Check how your broker defines a point and the contract size before you trade.