Coinbase said it would suspend trading of XRP, with the cryptocurrency US Securities and Exchange Commission suing last week, claiming it was indeed a security.
Coinbase first listed XRP on its retail-facing platform in February 2019. Now, XRP trading “will only run into limits,” Coinbase wrote. It will be fully suspended on Tuesday, January 19, 2021 at 1 pm ET.
Coinbase’s chief legal officer, Paul Grewal, wrote in a blog post, “We will continue to monitor legal developments related to XRP and update our clients until more information is available.”
Coinbase said users’ XRP purses “will be available to receive and withdraw functionality after trading suspension.”
In particular, the exchange stated that it would still support the upcoming airdrop of Spark tokens to XRP holders. XRP will still be supported by Coinbase Custody and Self-Custodial Coinbase Wallet.
Coinbase declined to comment beyond its written statement.
The price of XRP on Coinbase dropped from $ 0.28 to $ 0.24 within the first 20 minutes of the announcement. Since the announcement of the SEC lawsuit last week, the price of XRP has dropped by more than 50%.
For Coinbase, the reason for leaving XRP as a traded asset was simple: As the company wants to go public, having a platform for something that would potentially mean a security would add more paperwork. Is, so it can legally be allowed to buy to retail customers. Sell the same cryptocurrency.
The SEC claimed last week that XRP is a security, and that Ripley has been selling it without registering or seeking a rebate for seven years, a $ 1.3 billion gain in the process. The legal battle is just beginning, and litigation can take years if Ripple fights the charges in court, as he has indicated.
Coinbase is now the largest exchange to act on XPP and can serve as a bellbinder for other platforms. On Friday, Bitstamp announced that it would stop XRP trading and deposits on January 8 for all US customers.
Similarly San Francisco-based OKCoin announced the XRP suspension before January 4, effective Monday.
XRP continues to be listed without registration as a securities exchange for exchanges that face potential consequences for the line, including potential enforcement actions. However, should Ripple prevail in its defense, Coinbase could likely re-list XRP quite easily.
Alex Kruger, a trader and analyst, stated, “Crypto exchanges are unregistered with the SEC (by choice, as entering carry on multiple burdens and increased costs) and thus it is in their best interests not to offer securities trading . This is for their protection, not for their customers. “
Gabriel Shapiro, a lawyer with Belcher, Smolen & Van Lu LLP, told CoinDesk last week that the question of whether exchanges should delist is a complex one involving both business and legal considerations.
Update (December 28, 23:35 UTC): XRP adds value feedback.