Home Business Small Exchanges Start Suspending XRP Trading Following the SEC Lawsuit

Small Exchanges Start Suspending XRP Trading Following the SEC Lawsuit

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ow the fourth-largest cryptoasset by market capitalization, XRP, has started getting suspended by small exchanges following a lawsuit filed by the US Securities and Exchange Commission (SEC) against major US-based blockchain company Ripple.

Some small exchanges have started notifying their users of certain changes regarding the trading of Ripple-affiliated XRP. Chicago-based digital asset exchange Beaxy Exchange said that as the SEC has charged Ripple with conducting an unregistered security sale, they have halted trading for XRP “pending further news,” while “XRP withdrawals will remain enabled until further notice.”

However, at the time of writing, the 24-hour trading volume at this exchange stands at USD 90,000, while XRP’s trading volume is only USD 11, per Coinpaprika.com data.

In either case, they’re not alone.

“We have suspended all XRP payment in and trading services on the OSL platform, effective immediately and until further notice,” stated today this digital asset platform licensed by the Securities and Futures Commission (SFC) of Hong Kong. Furthermore, “CrossTower made the decision to remove XRP from its US-based trading platform – effective immediately,” said the exchange and a member of the Coinbase-led Crypto Rating Council in their December 22 announcement.

As reported, the SEC filed an expected action against Ripple and two of its executives, Christian Larsen and Brad Garlinghouse, claiming that they raised over USD 1.3bn through an unregistered, ongoing digital asset securities offering, while “Larsen and Garlinghouse also effected personal unregistered sales of XRP totaling approximately USD 600 million.”

Some have reacted negatively to the above-mentioned announcements by the exhanges, claiming, for example, that this is damaging to investors and that it’s too early to make moves before any sort of ruling. Beaxy co-president Nick Murphy argued in return that it’s the exchange’s “responsibility to be proactive on things like this,” and that “users can still withdrawal, we are just halting trading until further clarification comes out.”

However, it seems that the Cryptoverse is expecting more exchanges to follow with announcements of their own about changes in trading and possible delistings, with some arguing it could be a coordinated effort, particularly given that the exchanges stand to lose money as well. Still, “any crypto exchange who doesn’t delist XRP this week is out of their mind” and “crazy to list it without a licence” should the SEC deem it a security, wrote Bruce Fenton, CEO of Chainstone Labs, with INX Limited‘s Alan Silbert agreeing.

While critics are stating that “small exchange delistings really don’t matter,” even if that were the case, the next to come might be the giants in the industry.

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Meanwhile, Messari CEO Ryan Selkis tweeted that “XRP holders are completely f*cked. I’d expect sub [USD] 0.10 by mid-Jan.” While Ripple might “get away with the ‘securities’ element” after a battle, they’ll find their ODL (On-Demand Liquidity), liquidity partners, and distribution dead, Selkis argued – particularly at this time when institutions are turning to bitcoin (BTC) and stablecoins.

However, OKEx CEO Jay Hao argued that “declaring XRP a security may allow Ripple to list on traditional stock exchanges and potentially open it up to a far wider market.”

Meanwhile, XRP has been dropping since the news of the lawsuit came out. At the time of writing (11:04 UTC), XRP, the worst performing coin among the top 280 cryptoassets by marke capitalization today, trades at USD 0.315 and is down by 33% in a day and 31% in a week. The price dropped by 26% in a month, trimming its gains over the past 12 months to less than 78%.

It has also dropped to the fourth place by market capitalization (USD 14.4bn), having previously occupied the third.

It also remains to be seen how Ripple partners will be affected by the lawsuit. MoneyGram will keep an eye on the situation reported Coindesk, and it “has continued to utilize its other traditional FX trading counterparties throughout the term of the agreement with Ripple.”
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