In the turmoil of the legal heat Ripple is facing from the United States Securities and Exchange(SEC), Coinbase has now joined B2C2 and other exchanges to suspend the trading of XRP on its platform. Coinbase, who listed XRP on its retail-facing platforms in February 2019, had concluded that the cryptocurrency trading will be limited for now and will be entirely removed from its platform by Tuesday, Jan. 19, 2021, at noon CT.
The move by Coinbase is purported to be a security move facilitated by the verdict of the legal tussle facing Ripple by the SEC. In a newsletter, Paul Grewal, Coinbase’s chief legal officer, affirmed that while this is the recent decision taken to favor all parties, Coinbase will continue to monitor all legal developments related to XRP and provide customers with prompt feedback.
The suspension will come in steps
Coinbase, the exchange used to buy, sell and store cryptocurrency in over 100 countries, has refused to comment on its official statement regarding the suspension. However, it has assured users that their XRP wallets will remain available to receive and withdraw after the trading suspension. It is still expected of the exchange’s custody and wallet to support XRP, at least for now. The exchange has also confirmed that it will still support an upcoming airdrop of Spark tokens for XRP holders.
The SEC’s report claimed that Ripple had been selling XRP for seven years without proper registration or at least an exemption, thus raising over a billion dollars in that period. The legal battle seems to be far from over, as it appears that Ripple will utilize every of its resources to fight the case in court.
On the other hand, Coinbase explained that it was obliged to drop XRP as a traded asset because as the company seeks to go public, being a platform for something that’s potential security would mean adding more paperwork simply so it could be legally allowed to let retail customers buy and sell a single cryptocurrency.
XRP facing a severe backlash
Coinbase has now joined a long list of exchanges to delist XRP, with other exchanges set to follow suit. Early last week, B2C2, the UK-based cryptocurrency market-maker, announced that it had delisted XRP from its platform. Similarly, On Friday, Bitstamp announced it would halt XRP trading and deposits for all U.S. customers on Jan. 8, 2021, with San Francisco-based OKCoin also announcing that XRP suspension will be effective from Jan. 4, 2021.
Alex Kruger, a trader and crypto analyst believes that exchanges that continue to list XRP without registering as a securities exchange with the SEC face potential consequences down the line, including possible enforcement action. He concedes that if Ripple prevails in its defense, Coinbase and other exchanges can list XRP back to their trading platform.