The price of XRP, previously the third-largest cryptocurrency by market capitalization, has plunged over 25% in 24 hours after popular cryptocurrency exchange Coinbase and Crypto.com announced trading suspensions for the cryptocurrency.
The suspension announcements came after the U.S. Securities and Exchange Commission (SEC) sued Ripple Labs over the sale of XRP, alleging it’s an unregistered security. The lawsuit alleges the firm paid cryptocurrency exchanges to permit “the buying and selling of XRP” on their platforms. Per The Wall Street Journal, at the heart of the lawsuit is whether XRP is a security that should have been registered with the regulator or not.
As Ripple did not register XRP as a securities offering, the regulator argues investors did not have adequate information, and as such the defendants – which include CEO Brad Garlinghouse and cofounder Chris Larsen – had an unfair advantage.
In an announcement, Coinbase revealed that in light of SEC’s action against Ripple “Coinbase plans to suspend trading in XRP on Tuesday, January 19, 2021.” Its Chief Legal Officer, Paul Grewal, wrote trading will for now move into limit only and will only be fully suspended next year.
Coinbase noted it will keep on monitoring the situation and provide users with additional updates. The trading suspension, it added, will not affect customers’ access to XRP wallets, which will remain available for deposits and withdrawals even after the suspension.
Customers will still be able to receive tokens from the Spark airdrop, and Coinbase Custody and Coinbase Wallet users will still have access to XRP. Crypto.com made a similar announcement, revealing that effective January 19, 2021, XRP will be delisted and trading suspended from the Crypto.com app in the U.S.
Withdrawals will remain available after the XRP token is delisted and will not be affected, it added. For Crypto.com Earn deposits of XRP, the funds will be unlocked and moved to users’ crypto wallets on December 29 with interest. Crypto.com will still support the Spark (FLR) token airdrop.
The price of XRP, based on the announcement, continued its descent. Data shows that at the beginning of the month XRP was trading above $0.61 and hit a high of $0.66, before plunging after the SEC announced its lawsuit. It’s currently trading at $0.202.
Since the lawsuit was announced several companies halted support for XRP. These include crypto exchanges Beaxy, CrossTower, OSL, and Bitstamp, as well as market makers Jump Trading, Galaxy Digital, and B2C2. Payment processor Simplex and asset management firms Bitwise and 21Shares also stopped supporting XRP.
Featured image via Pixabay.