XRP delisted on more platforms following SEC's Ripple complaint
- The cryptocurrency exchanges Crypto.com, Coinbase, and OKCoin said this week that they were suspending trading of the XRP token following a Securities and Exchange Commission complaint against its developer,
Ripple Labs. XRPdropped 31% on Tuesday but had climbed back roughly 23% as of Thursday.
- XRP, the coin, "is one foot in the grave," Phil Liu, the chief legal officer at Arca, told Business Insider. "Ripple, the company, may be insolvent by the end of 2021 if it can't raise money by selling XRP and its other products aren't profitable."
SEC's lawsuit is against Ripple, not XRP. TechCrunch founder Michael Arrington said that "whatever happens to Ripple, XRP will continue to exist," because it's "independent of the company."
- Visit Business Insider's homepage for more stories.
Several cryptocurrency exchanges have delisted trading of the XRP token this week following the Securities and Exchange Commission's complaint against its developer, Ripple Labs.
Exchanges and finance platforms including Crypto.com, Coinbase, and OKCoin said they were suspending trading of the XRP token. Wirex, a crypto-payments firm, and Ziglu, an app, followed suit, according to The Block.
The SEC complaint accused Ripple of effectively running a $1.3 billion unregistered offering with its sales of XRP, which the regulator deemed a security and not a cryptocurrency.
"We have been closely monitoring the news surrounding the December 22nd SEC lawsuit against Ripple, the company behind XRP, and two of its key executives," OKCoin said in a statement on Monday. "As the lawsuit proceedings take place, we have determined it is the best course of action to suspend XRP trading and deposits on OKCoin effective January 4, 2021."
Coinbase said that "in light of the SEC's lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform."
Read more: Ron Baron earned a $4.2 billion windfall just from investing in Tesla. The legendary investor told us why he still expects a 30-fold return from Elon Musk - and shared the biggest lessons and mistakes of his career.
XRP dropped 31% on Tuesday, losing 75% in value since hitting a two-year high in early November, when investors took advantage of a weaker US dollar to pile into cryptocurrencies.
As of Thursday, the coin has gained roughly 23% since its Tuesday low.
Phil Liu, the chief legal officer at Arca, said the SEC lawsuit was a risk for the XRP token and a more serious one for Ripple.
XRP, the coin, "is one foot in the grave," Liu told Business Insider. "Ripple, the company, may be insolvent by the end of 2021 if it can't raise money by selling XRP and its other products aren't profitable.
"I don't see a viable alternative to replace XRP sales except to move out of the US and exclude US investors from buying XRP. They would have to start from scratch, because all XRP profits would be disgorged since they all occurred when Ripple was a US-based company."
However, Michael Arrington, the founder of TechCrunch and a partner at Arrington XRP Capital, said XRP would still be a viable token, as Ripple doesn't own all of XRP. The SEC lawsuit is against Ripple, not the XRP token.
"Whatever happens to Ripple, XRP will continue to exist. It exists independent of the company. It exists on a distributed ledger," Arrington said.
Arrington said he believed the SEC wanted to bring the case to court to establish clearer guidance about cryptocurrencies.
He also said it was unclear whether the rest of the SEC or the Justice Department felt the same way about Ripple as outgoing
Chris LaVigne, a partner at the law firm Withers, said it was hard to say what Clayton's suit means for the future of cryptocurrency regulation.
"This suit was filed just before a change in administration. It is a surprising action in that respect," LaVigne told Business Insider. "There was clearly no immediate need for an enforcement action, and it is unclear how the new administration will view the lawsuit or the commission's general enforcement agenda in this area."
- 7 Must visit temples in Andhra Pradesh
- Fuel your brain: 7 Foods to enhance mental sharpness during exam time
- I'm still the CEO, management remains unchanged: Byju Raveendran
- As many as 275 cases of rape in custody registered from 2017-22: NCRB
- Monthly household consumer spending more than doubled in last decade