Coinbase said it would halt trading in XRP, the cryptocurrency that sued the U.S. Securities and Exchange Commission, last week, claiming it was indeed a security.
Coinbase first listed XRP on its retail platforms in February 2019. From now on, XRP trading will ‘only move to its limit’, Coinbase wrote. It will be fully suspended on Tuesday 19 January 2021 at 13:00 ET.
“We will continue to monitor legal developments regarding XRP and update our customers as more information becomes available,” Paul Grewal, Coinbase’s Chief Legal Officer, wrote in a blog post previously shared with CoinDesk.
Coinbase said users’ XRP wallets would “remain available for receiving and withdrawing functionality after the suspension of trading.”
The exchange in particular said it will continue to support an upcoming air-drought of Spark tokens to XRP holders. XRP will continue to be supported by Coinbase Custody and in the self-managed Coinbase Wallet.
Coinbase declined to comment outside of its written statement.
The price of XRP on Coinbase rose from $ 0.28 to $ 0.24 within the first 20 minutes of the announcement. Since the announcement of the SEC lawsuit, the price of XRP has fallen by more than 50%.
For Coinbase, the reason for abandoning XRP as a traded asset was simple: as the company seeks to become a platform for something that is potentially a security, it would need to add more paperwork so that it can be legally allowed to get retail customers to buy sell a single crypto-currency.
The SEC claimed last week that XRP was a security and that Ripple had been asking for it for seven years without registration or release, raising $ 1.3 billion. The legal battle itself has only just begun, and disputes could last for years if Ripple fights the charge in court, as indicated.
Coinbase is now the largest exchange trading on XRP and can serve as a chime for other platforms. On Friday, Bitstamp announced that it would discontinue XRP trading and deposits for all U.S. customers on January 8th.
Similarly, OKCoin, based in San Francisco, announced its XRP suspension earlier Monday, effective January 4th.
Stock exchanges that continue to list XRP without registering as a security exchange with the SEC have potential consequences in the end, including possible enforcement actions. However, should Ripple prevail in its defense, Coinbase could probably re-list XRP fairly easily.
Alex Kruger, a trader and analyst, said: ‘Crypto exchanges are not registered with the SEC (by choice, as registration involves a lot of burdens and increased costs) and it is therefore in their best interest not to trade securities. . This is for their protection, not for their customers. ”
Gabriel Shapiro, a lawyer for Belcher, Smolen & Van Loo LLP, told CoinDesk earlier this week that the question of whether the exchange should be removed is a complex question, with both business and legal considerations.
UPDATE (28 December, 22:54 UTC): Add XRP pricing response.