Bitstamp becomes the first major cryptocurrency to delist XRP following SEC allegations that the token was traded as an unregistered security.
Bitstamp Joins a Number of Exchanges Delisting XRP
One of the most valuable cryptocurrencies, XRP, is in a free fall after the US-based crypto exchange Bitstamp announced it is ceasing XRP trading and deposits for all US customers as of January 8, 2021.
The decision comes in response to the US Securities Exchange Commission’s (SEC) recent filing against Ripple Labs for alleged unregistered securities sale.
US users will be able to withdraw XRP from the crypto exchange even after the trading is stopped and the decision will not affect other countries, Bitstamp said.
According to an SEC press release, since 2013, CEO Bradley Garlinghouse and co-founder Christian Larsen have generated more than $1.38 billion from sales of the XRP token, when it should have been registered as a security.
XRP Suffers Extreme Volatility in the Recent Years
The digital currency, which is issued and partly managed by Ripple, was down by 7.4% on December 26, the day after Bitstamp’s announcement. XRP has lost 51% of its value since the beginning of December, when it stood at $0.61.
Since reaching the record high of $3.84 back in January of 2018, the coin has undergone strong devaluation in the past two years to sit at just $0.29 on December 27.
Several other cryptocurrency exchanges, such as OSL, Beaxy, CrossTower and B2C2 have removed XRP from their platforms to avoid legal actions on behalf of US regulators. More industry players are expected to take similar actions ahead of the lawsuit’s eventual outcome.
On December 23, crypto money manager Bitwise announced it has liquidated $9.3 million worth of XRP in its crypto index fund and has redistributed the amount to other assets.
With this in mind, analysts have a negative outlook on the coin’s value and are unsure if it will even manage to survive in the long term.
XRP Loses Against Rival Bitcoin
In addition, the former third-ranked cryptocurrency by market cap is losing ground on Bitcoin (BTC) and has helped its rival approach the 70% market dominance mark. The world’s largest cryptocurrency by market cap reached $28,220.50 in price valuation on December 27.
In early December, Ripple said it will wait to see the incoming crypto regulations from the Biden Administration before deciding definitely on its plan to exit the USA. Ripple has reportedly become dissatisfied with the regulatory climate in the country and was considering a relocation to an overseas destination, most probably Japan or Singapore.