XRP Whale Transfer $120 Million: Regulatory Risks and Market Implications

On 16 May 2025, the cryptocurrency market witnessed a massive transfer of 50 million XRP with an approximate value of 95 million pounds (120.8 million USD), between two still unknown wallets of the whales, according to the blockchain tracker, Whale Alert. This off-exchange trade where money transferred to a wallet where it had lain dormant since late 2024 has raised a lot of speculation on what it was and what effect it may have had on the price of XRP, which has recently stabilised around the 1.60p or more (currently selling at $2.02) mark.

The presence of this kind of whale activity comes as increased regulatory attention towards cryptocurrencies in the UK is combined with similar efforts globally. The whale activity here highlights the key regulatory risk associated with XRP, which is the risk of associated market manipulation via larger, potentially less transparent transactions. In this paper, the author investigates the regulatory issues, the market conditions, and the high-level concerns of such transfers of whales.

What Happened to the 120 MILLION XRP Transfer?

Whale Alert states that the transfer of 50 million XRP, which involved one transaction, took place on 16 May 2025, as the funds were transferred between two anonymous wallets that had not been active for months before. This was after a similar move of the same amount of money was moved via XRP between other whale addresses yesterday, in an indication of great off-exchange movement.

In sharp contrast to exchange to transaction, which can frequently foretell an eventual sell-off, the movement of these wallets presages a tactical reposition, potentially in pursuit of security of personal wealth, institutional rebalancing, or the precursor to a market move of an immense scale. Nonetheless, even amid such volumes of transactions, the price of XRP remained constant at close to its current rate of 1.92 pounds sterling ($2.40), and only 2.92% down over 24 hours, according to the information available on CoinMarketCap.

The speculation has been fuelled by the fact that the wallets behind them are anonymous and do not have an immediate impact on pricing. Other analysts, as written in TradingView, believe this may be a tactic to create hype and add bullish sentiment to the market. In contrast, some believe that it is an ordinary exercise by the high-net-worth individuals or institutions in portfolio management. Nevertheless, the prohibitive aspect of such transfers is that they are shrouded in mystery, and this poses a major regulatory issue, especially when it comes to transparency in the marketplace.

Reg Risk: The Market Manipulation Risk

The main regulatory risk of large whale transfers of XRP is the possibility of market manipulation. In the UK, the Financial Conduct Authority (FCA) has keen eyes on cryptoassets to see the manipulative activity occurring contrary to its regulations issued under the Market Abuse Regulation (MAR), including instances of pump-and-dump schemes or wash trading. The intentions of big players can be challenging to reveal by regulators, as major purchases and sales by anonymous wallets may hide that big players intend to manipulate the price or the amount of XRP on the market artificially.

XRP is classified as an unregulated token under the Financial Services and Markets Act (known in short as the cryptoasset framework) by the FCA in 2023. However, its usage in a financial transaction will fall within the regime of anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.

The anonymity of whale wallets also hinders compliance with such regulations, as the authority requires transparency in suspicious activities to prevent illegal activities. Should regulators believe that these transfers are part of collusion with other traders in an attempt to either falsely inflate trading volume or artificially create an upward momentum in trading, then issuers like Ripple Labs and those who deal with it may find themselves under investigation, fined, or prevented.

There are also similar issues in other countries. In the US, the Securities and Exchange Commission (SEC) has been locked in a court challenge against Ripple Labs, and one of the most crucial appeal briefs is expected on 15 January 2025. SEC has already claimed that it was possible to manipulate the market by using significant XRP transactions, which has raised the prospect of it being an unregistered securities offering. Off-exchange transfers, the latter being worth 120 million dollars, could be a subject to even more investigation, with the US currently insistent on cracking down on crypto regulations.

Wider Market Connotations

The whale transaction of XRP coincides with an optimistic sentiment in the market due to the 2024 court case victory of Ripple against the SEC, and the speculation of an XRP exchange-traded fund (ETF) in the US. Analyst Ali Martinez has identified a bullish flag pattern and believes a potential rise to 3.20 bucks (3.4 pounds) is likely if XRP holds above 2.72 pounds (3.4 dollars).

The fact that the transfer occurs when XRP is in the process of consolidation above the price of 1.60 pounds ($2) has revealed some theories that XRP whales are preparing to push the price to a breakout above 2.40 pounds ($3) or even more. Nevertheless, the volatility also comes with the movement of large whales. Although the transfer on 16 May did not affect XRP price instantly, the historical data indicates that whale activity may go first and can be followed by considerable price fluctuations.

An example is that on 9 May 2025, a transfer of XRP worth 69.5 million (695 million) to Coinbase instigated a sell-side panic, yet the prices continued to show sustained bullish momentum. The fact that the last transfer was off-exchange suggests it may not be due to selling pressure, making it unlikely to have a significant effect. However, if the recipient wallet transfers to an exchange in the future, it could potentially drive the price back down.

Considerations of the Consumer and Investors

To UK investors, regulatory risks associated with XRP whale transfers serve to remind them to be cautious. FCA has also cautioned against crypto investment and urged people to understand that such investment is precarious and is not under the Financial Services Compensation Scheme (FSCS).

The uncertainty that large and anonymous transactions can create could negatively impact markets, and therefore, it is pivotal that an investor carries out comprehensive research before acting on mere hype. The optimism of the XRP community that has been escalated on X reflects how critical verifying on-chain information and tracking the activity involving whales is.

The Path Ahead: Oversight and Disclosure

Ripple Labs and all the crypto platforms should make large transactions more transparent to reduce the manipulation risks of regulation. The wallet activity is traceable using blockchain analytics infrastructure such as Whale Alert and Bithomp, although some authorities may demand the disclosure of large transfers as a binding requirement.

The UK is in the process of implementing a comprehensive crypto financial setting, to be developed in the next 5 years, which may involve increased regulations on whale-related transactions to ensure their integrity in that market. Internationally, regulating crypto through harmonisation would eliminate the risks associated with whale activity across different jurisdictions.

Consistent standards have been promoted by the Financial Stability Board (FSB) regarding market manipulation and AML concerns, and this has the potential to stabilise such assets as XRP. In the meantime, investors are advised to be cautious, as reasons to remain optimistic regarding XRP include both solid fundamentals, e.g., the possibility of using it in cross-border payment transactions through the XRP Ledger, and technical reasons, i.e., potential growth progress over a long time horizon.

Conclusion

The recent transfer of $120 million of XRP by the whale on 16 May 2025 highlights the risk of regulatory struggles against market control due to the anonymity and magnitude of such operations. Although the price of XRP has managed to hold up, the whale activity is highly questionable to regulators across the UK and the rest of the world.

With speculative investments in ETFs and changing policies, investors should be aware of the crypto market challenges and be cautious about the attractive, but risky, properties of 1) XRP and 2) the fear of investors losing everything. The combination of whale action, regulatory scrutiny, and the market mood will determine the direction that XRP takes in the next couple of months.