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30 Dec, 2020 09:18

Major cryptocurrency XRP crashes as exchanges ditch token over SEC lawsuit

Major cryptocurrency XRP crashes as exchanges ditch token over SEC lawsuit

The price of one of the world’s most traded cryptocurrencies, Ripple’s XRP, has continued to plunge after crypto exchange Coinbase became another platform to announce the removal of the coin.

Ripple’s XRP, the fourth-biggest token by market capitalization, was down 13 percent on the day, sitting at just above $0.20 as of Wednesday morning. It has lost over 43 percent of its value over the past week and is down more than 70 percent against its last month’s high of around $0.70.

The latest drop came shortly after US-based platform Coinbase made the decision to suspend XRP trading pairs from its marketplace “in light” of US Securities and Exchange Commission’s (SEC) lawsuit against XRP’s creator, Ripple. Trading will be fully halted on January 19.

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Coinbase’s announcement came just days after similar decisions by other cryptocurrency exchanges. Bitstamp said last week it would remove the option for XRP trading and deposits for all US customers on January 8, while OKCoin’s delisting of the cryptocurrency comes into effect on January 4. Such firms as B2C2, OSL, Crosstower, and Beaxy similarly decided to halt XRP trading.

“This is obviously bad for XRP across multiple dimensions: fewer potential buyers, and lower overall liquidity. For XRP to work as Ripple intends, XRP needs to be very liquid, so this is particularly harmful,” Kyle Samani, co-founder of Multicoin Capital, was quoted as saying by Bloomberg.  

As most of its digital peers, XRP enjoyed one of its biggest rallies in years in recent months as global investors started piling into cryptocurrencies. However, most of this year’s gains were erased when the SEC filed a lawsuit against Ripple and two of its executives. In a complaint unveiled earlier this month, the regulator said that Ripple had sold more than $1.3 billion in unregistered tokens since 2013. The SEC insists that XRP is actually a security and thus should have been registered with the commission. 

Ripple, which had been anticipating a sweeping lawsuit from the SEC before the official announcement, called the SEC’s allegations “an attack on the entire crypto industry” in the US. It noted that the regulator just “needlessly muddied the waters” and hurt countless innocent XRP retail holders instead of introducing regulatory clarity for crypto. 

“The SEC has introduced more uncertainty into the market, actively harming the community they’re supposed to protect. It’s no surprise that some market participants are reacting conservatively as a result,” Ripple said in statement, adding that it will continue to work with the SEC’s new leadership once appointed.

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