The US Securities and Exchange Commission's (SEC) recent lawsuit against Ripple Labs has triggered significant repercussions across the cryptocurrency market. Leading US-based exchange Coinbase has announced it will suspend trading of XRP, the fourth-largest cryptocurrency by market cap, effective January 19, 2021.
Coinbase’s Decision to Halt XRP Trading
In an official blog post, Coinbase revealed its decision to suspend XRP trading pairs due to the SEC’s allegations that Ripple conducted an unregistered securities offering. The exchange stated:
"In light of the SEC’s lawsuit against Ripple Labs, Inc., we have decided to suspend the XRP trading pairs on our platform. Trading will move into limit-only mode starting December 28, 2020, at 2:30 p.m. PST, and will be fully suspended on Tuesday, January 19, 2021, at 10 a.m. Pacific Standard Time."
Key Points:
- Limit-Only Trading: From December 28, users can only place limit orders for XRP.
- Full Suspension: Trading will cease entirely on January 19, 2021.
- Wallet Access Unaffected: Users retain access to XRP wallets post-suspension.
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SEC Lawsuit and Market Impact
The SEC alleges Ripple raised $1.3 billion through unregistered XRP sales, classifying the token as a security. Since the lawsuit was filed:
- XRP’s price plummeted 42%, dropping from $0.47 to $0.27.
- Multiple exchanges, including Binance US and OKCoin, have delisted or suspended XRP trading.
Ripple’s Response
Ripple Labs has vowed to contest the lawsuit aggressively, asserting its compliance with regulations. CEO Brad Garlinghouse criticized the SEC’s approach, arguing that XRP is a currency, not a security.
What’s Next for XRP?
The outcome of Ripple’s legal battle will significantly influence XRP’s future. Coinbase remains cautious, stating:
"We will continue to monitor legal developments related to XRP and update our customers as more information becomes available."
FAQs
1. Can I still withdraw XRP from Coinbase after January 19?
Yes, wallet access remains unaffected; only trading is suspended.
2. Will other exchanges delist XRP?
Several exchanges are reviewing their policies, with some already suspending XRP trading.
3. How does the SEC’s lawsuit affect XRP’s classification?
If XRP is deemed a security, it may face stricter regulatory scrutiny.
4. Is Ripple planning to settle with the SEC?
Ripple has publicly stated it intends to fight the lawsuit in court.
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Conclusion
The SEC’s action against Ripple marks a pivotal moment for XRP and the broader crypto industry. While exchanges like Coinbase react cautiously, Ripple’s legal strategy will determine whether XRP can regain its standing. Investors should stay informed as developments unfold.
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