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 Since the news of the U.S. Securities and Exchange Commission’s lawsuit against Ripple Labs was disclosed on December 21, the market value of XRP has declined by $16 billion, representing a reduction of 63%. The SEC’s lawsuit alleges that since 2013, Ripple Labs has raised $1.3 billion by selling the unregistered security XRP to investors, including those in the United States. A devastating blow caused the price of the coin to crash, following the cryptocurrency exchange’s suspension of coin trading and the settlement of related assets. How did this happen? The SEC accused Ripple and two of its executives of conducting a $1.3 billion offering of unregistered securities. https://t.co/3VP23RpSyV -SEC_News (@SEC)_News) December 22, 2020 A sad story XRP once benefited from the bull market of Bitcoin. On Thursday, December 17th, the price of XRP reached a high of $0.6, giving it a market value of $27 billion. However, everything went haywire when Ripple spread the news about the impending SEC lawsuit at 1 a.m. on December 21. By the time the SEC filed its lawsuit the following day, the token had already dropped to $0.5. As the SEC previously stated, the complaint alleges that the XRP tokens held by Ripple, Larson, and Garlinghouse constitute unregistered and unauthorized securities. This complaint had a significant ripple effect across the entire crypto industry. If the SEC were able to persuade a judge to classify XRP as an investment security subject to U.S. regulatory oversight, it could use the same reasoning to sue cryptocurrency companies that trade XRP or exchanges that facilitate the sale of these coins. The price of XRP plummeted shortly after the announcement by the U.S. Securities and Exchange Commission (SEC), and further declined when several crypto companies concerned about potential implications announced that they would discontinue any association with XRP or cease trading the asset. “Effective immediately, Beaxy Exchange will cease all trading activities related to XRP derivatives. “Withdrawals will remain available until further notice,” stated a Beaxy press release on December 22, 2020. Beaxy was one of the first exchanges to remove XRP from its listing, and soon after, other exchanges followed suit. On December 23, 2020, after similar announcements were made by Galaxy Digital, Jump Trading, Bitwise, CrossTower, and OSL, the price of XRP dropped to $0.26. On December 26, 2020, the price of XRP returned to $0.31. However, news that Bitstamp would stop offering trading and deposit services for XRP to U.S. customers in January caused the price of XRP to drop again, this time to $0.29. Bitstamp stated in a press release that…: “In light of the recent documents submitted by the SEC to Ripple Labs Inc., which classify XRP as a security, we will be terminating all trading and deposit services related to XRP for U.S. customers at 9:00 PM UTC on January 8, 2021. ” London’s B2C2 is the next exchange to prohibit U.S. investors from buying and selling XRP. On December 27th, after the announcement of B2C2’s decision, the price of XRP dropped to $0.28. Ripple suffers, and exchanges take advantage of the situation On December 28th, two American cryptocurrency exchanges, OKCoin and Coinbase, announced that they would suspend trading of XRP, dealing another heavy blow to the asset. OKCoin stated in a release that…: “As the legal proceedings unfold, we have determined that suspending XRP trading and deposits starting from January 4, 2021, is the best course of action for OKCoin. ” Hours after OKCoin announced the suspension of XRP trading, one of the largest cryptocurrency exchanges in the world, Coinbase, also stated that it would cease offering XRP trading services to its American customers starting on January 19th. As part of the recent actions taken by the U.S. Securities and Exchange Commission against Ripple, all XRP accounts were switched to a trading-only status. Coinbase has plans to completely suspend XRP trading at 10 a.m. on Tuesday, January 19, 2021. Users will continue to have access to their XRP funds. https://t.co/izreZvgHNl - Coinbase (@coinbase) December 28, 2020 In a statement on the Coinbase blog, Chief Legal Officer Paul Grewal said:: “In light of the SEC's lawsuit against Ripple Labs Inc., we have decided to suspend XRP trading pairs on our platform. ”  According to real-time trading data from non-small-cap exchanges, at the time of writing this article, the total market value of XRP was $8.71 billion, and its trading price was $0.1994. Ripple’s response In response to the previous lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple, Ripple Labs issued a statement stating that the public and the media have only heard about this matter from the perspective of the SEC, and that the company will respond to these unsubstantiated allegations in the coming weeks. Ripple stated that the SEC’s lawsuits have affected countless innocent Ripple coin holders who have no connection to the company, adding further uncertainty to the market. Ripple stated that it will defend the company’s interests and looks forward to resolving this issue in court. At the same time, Ripple stated that it will continue to operate and support all its products and customers in the United States and around the world. Written in Conclusion On one hand, various institutions are rushing into the cryptocurrency market; on the other hand, the United States is regulating the market through institutional frameworks and legal regulations, in essence “cleaning up” the market to create a cryptocurrency environment that resembles traditional finance. Ripple was just the first example to undergo such changes; it is likely that other cryptocurrencies will follow suit in the future.  WeChat ID: Bit _Time666 Scan and follow us to join us on this journey into encryption   |
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