- Ripple’s XRP is struggling after Ripple received a lawsuit from the SEC.
- Bitstamp is the largest crypto exchange that has blocked US customers so far.
- The third largest cryptocurrency is struggling to maintain its price with these allegations.
- The popular exchange Bitstamp has said it will stop XRP trading for US customers. Earlier, the SEC announced that it would take legal action against Ripple Labs.
Discontinuation of XRP trading
XRP haters are pleased as yet another crypto exchange stops trading the coin. After Ripple revealed that it was facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) for illegal securities sales, the price of XRP plummeted.
Shortly after, a number of exchanges began delisting Ripple’s XRP or ceasing trading it for U.S. customers. Exchanges OSL, CrossTower, and Beaxy all stopped XRP trading. Crypto hedge fund Bitwise removed Ripples XRP from its portfolio. All cited the SEC complaint as the reason.
Then Bitstamp threw in the towel and announced the end of XRP trading for its US clients. Bitstamp is the largest exchange to have done so to date.
On their website, the company announced that they will stop trading and all deposits for Ripples XRP on January 8, 2021 at 9pm UTC. US customers will be able to withdraw the token after that, and citizens of other countries are not expected to be affected.
Bitstamp (with a daily trading volume of $500 million) plans to keep an eye on the situation and adjust accordingly.
The “very best security”
The feds accuse Ripple CEO Brad Garlinghouse and co-founder Chris Larsen of conducting an “ongoing” illegal securities sale.
In the U.S., securities must be registered with the appropriate authorities, usually the SEC, in order to be publicly traded. Non-securities include things like real estate and currencies. Ripple Labs insists that Ripple’s XRP, designed to streamline money transfers, is a currency – not a security.
When the Fed comments on the status of a cryptocurrency, it usually refers to it as property. Some frustrations arise with phenomena like proof-of-stake, where small block rewards could each be considered separate taxable events.
There are some moves in Congress to smooth out these inconsistencies.
In the past, the U.S. government has indicated that it would not consider Bitcoin (BTC) and Ethereum (ETH) as securities. In 2019, Larsen and Garlinghouse wrote an open letter urging the U.S. government to slow down regulation.