The 80 and the 20 – one decision that echoed for ten years

There is one set of numbers in the Ripple story without which most of the later lawsuit, the regulatory disputes and the community anger remain incomprehensible. It is not a complicated number. It has two parts: 80 and 20.

What is interesting about it is not its size, but that it was a single decision, taken within a few weeks – and its consequences were still being argued in court filings ten years later.

The source of the numbers is not a blog post and not an interview but a court document: the SEC complaint filed on 22 December 2020 (SEC v. Ripple Labs Inc., 1:20-cv-10832, Doc. 1). That document records what happened in three consecutive paragraphs.

The founding of the company. According to paragraph 44 of the complaint, Ripple was founded in September 2012 – in the complaint's own terms, by the co-founder, Larsen, and a third person referred to as Ripple Agent-1.

The completion of the supply. Paragraph 45 places the completion of the XRP Ledger in December 2012 and states that this is when – at negligible cost – the fixed supply of 100 billion XRP came into existence, which has been the basis of the system ever since.

The division. And then paragraph 46, the core of the whole story: 80 billion XRP went to the company and 20 billion to the founders – of which 9 billion each to the co-founder and to Larsen, and 2 billion to Ripple Agent-1, in the complaint's wording as consideration provided to Ripple's founders.

It is worth pausing on the fact that the complaint does not name all three of them: for two of the participants it uses pseudonymous designations. On the basis of public sources their identities can be regarded as generally known, but the document itself uses the designations – and we quote the document, not common usage.

Here comes the detail that most summaries blur, and which we cannot in good conscience blur.

Our book gives 2 June 2012 as the launch date, following the XRP Ledger's own documentation. Paragraph 45 of the complaint, however, states completion in December 2012.

The two do not necessarily contradict each other: they may refer to different events – going live, and the creation of the final code and final supply. But until we can prove that, these are two data points living side by side, each with its own source. We do not choose between them, and we do not knead them into one prettier sentence.

This small detail shows well what working by the documentary method means: sometimes the most correct sentence is that the two sources say different things, and we cannot resolve it.

Paragraphs 52–53 of the complaint record something that places the whole of the later legal dispute in a different light: two legal memos – dated 8 February 2012 and 19 October 2012 – warned the company and Larsen that XRP might qualify as a security.

So the risk was not first raised in 2020, when the complaint was filed. It was there at the very beginning, in writing, before the division became final.

This fact decides nothing in itself – a legal memo raising a risk does not turn it into a legal classification. But it is part of the story, and a documentary treatment cannot leave it out.

What an investment contract and its related concepts precisely mean, we have gathered in one place in our glossary.

Two further data points from the same document that shade the technical picture.

According to paragraph 41 of the complaint, roughly 40 per cent of the validator nodes were run by US-based organisations. That figure is not incidental to the jurisdictional question: the geographical distribution of a network influences which country's regulator considers itself competent.

And a table in the complaint splits the sales into two branches: 3.9 billion XRP in Market Sales and 4.9 billion XRP in Institutional Sales. That separation did not remain without consequence – the court's 2023 order reached different conclusions precisely along the lines of the sales channels. We wrote about that separately: What the Torres ruling says – and what it does not.

Because the 80/20 division is not an old financial line item but the point from which every later dispute originates: who holds the supply, at what pace it enters circulation, and whose decision that is.

The story starts here – its continuation, from 1988 to 2026, traced source by source, is in RIPPLE – An Unofficial Documentary Study, our 22-chapter book, in English, Hungarian and Spanish.

The verification workflow behind it is documented and public at the Uncle Sunny Academy.

It does not claim that the 2 billion XRP figure is beyond dispute: the complaint says 2 billion, but there is public analysis that gives 1 billion – we keep the two side by side and treat the court document as the stronger source, not as settled. It does not claim that the launch date has been settled: two sources give two dates, and we leave that open. It does not claim that any legal conclusion follows from the existence of the legal memos. It says nothing about what holdings the persons mentioned here have today – the document records the state of 2012. And it takes no position on whether the division was right or wrong.

Educational content, not investment advice. Independent publication, not affiliated with Ripple Labs Inc.

Source: SEC v. Ripple Labs Inc., 1:20-cv-10832, Doc. 1 (Complaint), S.D.N.Y., 22 December 2020 – ¶41, ¶44, ¶45, ¶46, ¶52–53 and the sales table attached to the complaint.