Coinbase has announced that it will be suspending XRP trading after the United States Securities Exchange took legal action against Ripple Labs and two of its executives.
According to a blog post Coinbase chief legal officer Paul Grewal, the San Francisco based exchange will suspend XRP trading starting January 19 10.00 am PST. The exchange clarified that the suspension could be effected even earlier if need be to maintain market health metrics. The suspension will not affect Ripple-backed Flare Network’s upcoming Spark (FLR) token airdrop.
“The trading suspension will not affect customers’ access to XRP wallets which will remain available for deposit and withdraw functionality after the trading suspension,” said Grewal. “We will continue to support XRP on Coinbase Custody and Coinbase Wallet.”
Coinbase is the first organization of its size to take a major step back from XRP following the charges leveled by the SEC. According to the SEC, Ripple CEO Brad Garlinghouse and co-founder Chris Larsen have a case to answer after allegedly conducting an “unregistered, ongoing digital asset securities offering.”
The move by Coinbase is likely to influence other exchanges to do the same. Just a few hours ago OKCoin exchange announced that it would suspend XRP trading beginning January 4 with the announcement being followed by a similar one by Bitstamp. Bitstamp will halt XRP transactions in the US first before proceeding to other jurisdictions. Smaller exchanges including CrossTower, OSL, Beaxy have also taken similar actions against trading the coin.
The action of the SEC, followed by the subsequent decision by Coinbase has seen the price of the token drop by 10 per cent. The token has fallen by 44% since the SEC made the announcement against Ripple Labs and two of its senior executives on DEC 22. The moves made by the likes of Coinbase dim any hope of buying the drop in the short term, should XRP survive the SEC onslaught. There is no ruling out a future rally north though, once XRP survives this storm.
Image Courtesy of Coinbase