The SEC’s $1.3 billion lawsuit against Ripple has already caused some exchanges to put things on pause.
Three crypto exchanges—CrossTower, Beaxy, and OSL—have halted the trading of XRP tokens after the US Securities and Exchange Commission (SEC) officially filed a $1.3 billion lawsuit against Ripple.
Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice.https://t.co/EXJJEHMawn
— OSL (@osldotcom) December 23, 2020
“Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice,” OSL wrote today.
As Decrypt reported, the SEC’s lawsuit was filed not only against Ripple itself but its co-founder Christian Larsen and CEO Brad Garlinghouse as well. The lawsuit alleges that Ripple has raised $1.3 billion in unregistered securities offerings since 2013.
SEC charges Ripple and two executives with conducting $1.3 billion unregistered securities offering https://t.co/3VP23RpSyV
— SEC_News (@SEC_News) December 22, 2020
“The defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws,” the SEC said in a press release.
I just read the 71 page SEC complaint vs. Ripple.
I think any crypto exchange who doesn’t delist XRP this week is out of their mind.
If the SEC says it’s a security you’d be crazy to list it without a license.
— Bruce Fenton (@brucefenton) December 23, 2020
If the SEC wins its case against Ripple and the court deems XRP unregistered securities, this will present a serious risk to every crypto exchange that currently lists the token, experts noted.
“I think any crypto exchange who doesn’t delist XRP this week is out of their mind. If the SEC says it’s a security you’d be crazy to list it without a license,” said Bruce Fenton, CEO of Chainstone Labs, today.
The SEC has charged @Ripple with conducting an unregistered security sale.
Due to this, #Beaxy has halted trading for XRP pending further news. $XRP withdrawals will remain enabled until further notice. pic.twitter.com/lVVqXJPdPP
— Beaxy Exchange (@BeaxyExchange) December 22, 2020
Thus, to mitigate these risks, crypto exchanges—at least smaller ones for now—have begun delisting XRP.
“CrossTower’s listing committee evaluates tokens along multiple dimensions. One of the criteria is whether an asset is a security. Given the uncertainty regarding XRP’s status, CrossTower has decided to delist XRP,” CrossTower president Kristin Boggiano told Coindesk.
And the price of XRP has felt the pressure. At press time, the token is trading at around $0.31—down 32.25% on the day, according to CoinMarketCap. The token has also lost its position as the 3rd largest crypto by its market capitalization, sliding down to the fourth place.
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