Key highlights:
- Coinbase will stop XRP trading on January 19
- Coinbase is a prominent exchange, and its actions are likely to influence other exchanges as well
- After Coinbase’s announcement, the XRP price experienced another major drop
Coinbase will stop XRP trading due to the lawusit between Ripple and United States Securities and Exchange Commission (SEC). Coinbase published a blog post about the issue and announced it would suspend XRP trading on January 19, 10 am PST. The announcement explains that the suspension won’t affect the Spark token airdrop which is expected to be delivered to holders of the XRP cryptocurrency.
According to the announcement, customers can deposit and withdraw XRP after the suspension, and it won’t affect Coinbase’s XRP wallet functionality.
The SEC’s lawsuit against Ripple is prompting cryptocurrency exchanges to take action regarding XRP
SEC has charged Ripple, as well as Brad Garlinghouse and Chris Larsen for allegedly selling unregistered securities. Essentially, the SEC is arguing that XRP is a security issued by Ripple, but hasn’t been registered as such, giving the company the benefits of issuing a security without any of the obligations.
Coinbase is one of the biggest players in the cryptocurrency industry, and the other businesses will undoubtedly be influenced by its action. Offering the trading of assets that could potentially be deemed as unregistered securities could result in a lot of risk for cryptocurrency exchanges.
Other exchanges like OKCoin and Bitstamp have also announced similar actions, and they will either limit or completely suspend XRP trading on their platforms.
After the news, the XRP price dropped dramatically, and briefly even fell below $0.20. The XRP cryptocurrency has been suffering negative price action ever since the SEC’s lawsuit against Ripple was announced, losing more than 50% of its value.
The future of XRP is now very uncertain, and it’s hard to predict what will happen to it until the court actually makes its decision or the SEC and Ripple reach a settlement. The litigation could continue for an extended period of time, and we certainly shouldn’t expect it to be resolved overnight.
With more exchanges either delisting XRP or suspending trading, the cryptocurrency will be affected by lower liquidity and will be much harder to access for cryptocurrency investors.
The recent developments regarding XRP show that there’s plenty of different risks when it comes to investing in cryptocurrencies. XRP enjoyed a bull run before the lawsuit was announced, and there was plenty of bullish sentiment surrounding the coin. But all the equations changed suddenly due to an intervention by regulators, and XRP is now in a very unfavorable position.
Andrew is a writer that does most of his work on cryptocurrency-related topics. While he’s primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.