It was only the tip of the iceberg last week when small exchanges and selected market-makers dropped Ripple (XRP) following the $1.3 billion USD lawsuit that the US Securities and Exchange Commission is bringing against the company, citing the illegal sale of unregistered securities over the span of seven years. While major exchanges held off on suspending XRP transactions, OKCoin and the US’ largest crypto exchange Coinbase have announced that they will be following suit in stopping XRP trades for the time being.
In their respective announcements, Coinbase said that XRP trades would be halted from January 19 onwards, while OKCoin is suspending XRP trading and deposits much earlier on January 4. Since the announcements, XRP’s prices have nosedived nearly 20% in the last 24 hours and is currently trading at $0.22.
In particular, Coinbase’s decision to remove XRP temporarily may have a ripple effect (pun not intended), driving other major exchanges to suspend XRP trades as well. Luxembourg-based exchange Bitstamp was the first large exchange to announce that it would be dropping XRP. Prior to that, three smaller exchanges were the first to cut ties with XRP fearing that they would be indirectly implicated.
Regardless of the outcome of the lawsuit, XRP’s reputation has inarguably taken a severe hit from this, which will also affect the rate of its recovery after. Investors’ loss of faith in the coin is unlikely to be regained effectively in the short term, and the progress it has achieved so far has been for naught.
Not everyone is throwing in the towel when it comes to the beleaguered coin, however, as Japan’s SBI Holdings have come forward to back XRP up, stating that it is not a security but legally a cryptocurrency asset in Japan.
