Lithuanian cryptocurrency exchange, CoinGate, will suspend trading in XRP on January 15th following Ripple Lab’s legal woes.
Another One Bites the Dust
In a series of tweets, the exchange said the decision was a result of a loss of ability “to exchange XRP for merchants that want payouts in fiat currency.”
Last year, the US Securities and Exchange Commission (SEC) filed a complaint alleging Ripple Labs participated in unregistered securities offerings over a seven-year period.
The regulator also charged former CEO and co-founder Christian Larsen, as well as current CEO Brad Garlinghouse, with facilitating the offerings and personally benefitting.
The case hinges on the designation of XRP tokens as securities, a description which is disputed by both Larsen and Garlinghouse.
At the same time, cryptocurrency payment solutions provider, Gatehub, whose technology uses the XRP Ledger, said it would continue to list XRP until the SEC case has an outcome.
Justifying the decision, Gatehub says they “never believed that XRP is a security” and saw no “improper market conduct” from Ripple Labs senior executives.
A Wave of Delistings
Seemingly, CoinGate is not willing to take that risk and is following the delistings on several high-profile exchanges. Binance, the largest cryptocurrency exchange globally by volume, delisted the legally troubled token today, citing concerns with its business in the US.
Several other exchanges also took similar action shortly after the SEC announced its decision late last year, including Coinbase, Huobi, and Bittrex.
There was a mixed reaction from the community. XRP fans decried the action from the exchanges. Some pointed out that the announcement was not new as XRP’s status as a security is unresolved.
Moreover, others cited declarations by regulators abroad affirming that XRP is not a security. CoinGate’s users were also surprised by its announcement, highlighting that the exchange is based in Lithuania, not the US.
The case sparked an XRP sell-off in the cryptocurrency market, with the token losing over 60% of its value following the SEC announcement. High-profile investors such as Grayscale also divested large portions of their XRP holdings shortly after the case became public.
With a pre-trial conference taking place on February 22, XRP investors still hope some positive news might change the short-term fate of their beleaguered token.
Either way, there’s no answer as of yet. Exchanges, like CoinGate act cautiously to protect themselves should the case go against Ripple Labs. The future of XRP now depends on the case.
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