Coinbase announced that it will suspend trading of the cryptocurrency XRP after the US SEC sued Ripple last week alleging that originally it is a security. Coinbase listed XRP for the first time in its retail platform in 2019 February. Coinbase announced that from this time onwards the trading of XRP will only move into limits. It will get entirely suspended on January 19, 2021, Tuesday. Paul Grewal, CLO, Coinbase told that they will continue monitoring the legal developments about the cryptocurrency and will continue updating all their customers as they get more information on the subject.
Coinbase further stated that the XRP wallets of their users will be available for withdrawing and receiving functionality following the suspension. The exchange noted that they will support the upcoming airdrop full of spark tokens for the cryptocurrency holders. The cryptocurrency will get supported by Coinbase Wallet and Coinbase Custody. The cryptocurrency’s price on Coinbase dropped from $0.28 – $0.24 in the 1st 20 mins of the declaration. Since the SEC sued the cryptocurrency last week, its price has dropped by over 50%.
Ripple Effect On XRP
The reason for Coinbase dropping the cryptocurrency was a simple one: Because the company is on the verge of going public, hosting the cryptocurrency which is potential security on their platform means that there would be additional paperwork for legally allowing its retail customers to sell and buy one single cryptocurrency.
It was claimed by the SEC last week that the cryptocurrency XRP is the potential security and Ripple continued to sell it without registration and without seeking the exemption of 7 years, making $1.3 bn in profits in this way. It is just a legal battle at the start and litigation usually takes years and it will be a lengthy process if Ripple fights back in court.
