Coinbase has announced that it will suspend trading of XRP after the US Securities and Exchange Commission (SEC) recently filed a lawsuit against Ripple Labs claiming the popular cryptocurrency is really a security.
The reason for this is due to how Ripple raised at least $1.38bn by selling XRP without registering or seeking an exemption for seven years.
While the legal battle between the SEC and Ripple could take years if the company fights the charge in court, Coinbase has joined the growing list of US cryptocurrency exchanges, including CrossTower and Beaxy, that have delisted XRP.
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In a new blog post, chief legal officer at Coinbase Paul Grewal laid out how the exchange's delisting of XRP will work for its customers, saying:
“In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform. Trading will move into limit only starting December 28, 2020 at 2:30 PM PST, and will be fully suspended on Tuesday, January 19, 2021 at 10 a.m. Pacific Standard Time.”
Although Coinbase has now made the decision to delist XRP on its exchange, Grewal said that the company will continue to monitor legal developments related to the cryptocurrency and that customers will receive updates with new information when it becomes available.
He also noted that the trading suspension will not affect Coinbase customers' access to their XRP wallets which will remain available for deposit and withdraw functionality even after the trading suspension. Additionally, the company's customers will also remain eligible for a previously announced Spark airdrop and it will continue to support XRP on Coinbase Custody and Coinbase Wallet.
Since its announcement last week, the SEC's lawsuit has led XRP's price to fall by more than 50 percent from $.45 cents per coin to around $.20 cents per coin.
While Coinbase wasn't the first cryptocurrency exchange to delist XRP, the move does make sense ahead of its historic IPO as the company's preliminary documents still need to be reviewed by the SEC. However, if Ripple is able to succeed in its defense, Coinbase will likely be able to relist XRP fairly easily.
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After working with the TechRadar Pro team for the last several years, Anthony is now the security and networking editor at Tom’s Guide where he covers everything from data breaches and ransomware gangs to the best way to cover your whole home or business with Wi-Fi. When not writing, you can find him tinkering with PCs and game consoles, managing cables and upgrading his smart home.