Coinbase announced today that it would suspend trading for XRP, the fourth-largest currency by market cap, after the US Securities and Exchange Commission accused Ripple Labs of raising $1.3 billion by selling the coin in unregistered securities sales.
“Given the SEC’s recent action against Ripple, all XRP books have been moved to limit only and Coinbase plans to fully suspend trading in XRP on Tuesday, January 19, 2021, at 10 AM PST. Afterwards, users will continue to retain access to their XRP funds,” it said in an announcement today.
The coin has dropped in price by 42% since the SEC announced the charges, from $0.47 to $0.27. The coin has already dropped in value by 8% following the news to $0.25.
Coinbase joins the growing list of cryptocurrency exchanges that have suspended trading of XRP after Bitstamp, Beaxy, CrossTower, OKCoin and OSL. XRP is still open for trading on Binance, Kraken, and Huobi.
Since news of the SEC’s lawsuit came to light, several funds have stopped trading and making markets with XRP Two of the largest crypto trading desk, Jump Trading and Galaxy Digital, have stopped making markets for XRP, and Bitwise has liquidated all XRP from its fund. B2C2 became the last market maker to stop trading in XRP.
The SEC’s suit alleges that Ripple raised $1.3 billion in XRP through unregistered securities sales since 2013—and continues to do so. Ripple has 55 billion XRP in escrow wallets, which it sells every so often to keep the price of XRP afloat.
The suit names Ripple’s co-founder Christian Larsen and CEO Brad Garlinghouse as defendants. They “abetted Ripple’s violations,” argued the SEC in its filing.
Ripple CEO Brad Garlinghouse has refuted the allegations. He said in a prepared statement, “The SEC is fundamentally wrong as a matter of law and fact.” Garlinghouse claimed that XRP is a currency, not an investment contract, so Ripple shouldn’t have to register with the SEC before it sells XRP.
Ripple Labs has pledged to win the lawsuit. “We are right and will aggressively fight – and win – this battle in the courts to get clear rules of the road for the entire industry in the U.S.,” it said.