On December 29, U.S. digital asset exchange Coinbase announced it would suspend trading of Ripple (XRP).
Key Details of the Suspension
- Trading Restrictions: Effective from 2:30 PM PST, with full suspension by January 19 at 10 AM.
- Wallet Access: Users retain access to XRP wallets for deposits/withdrawals post-suspension.
Following the announcement, XRP’s price dropped from $0.28 to $0.23, marking a 50%+ decline since the SEC’s lawsuit (December 23).
SEC Lawsuit Against Ripple Labs
The U.S. Securities and Exchange Commission (SEC) accused Ripple Labs of conducting an unregistered $1.3B securities offering via XRP sales. Executives were also charged for personal gains.
Core Debate: Security vs. Cryptocurrency
- SEC’s Stance: XRP qualifies as a security under U.S. law due to its centralized issuance by Ripple (80% held by the company).
- Ripple’s Defense: XRP is a virtual currency, per 2015 U.S. Treasury/DOJ classifications. CEO Brad Garlinghouse criticized the SEC’s "unique" interpretation.
👉 Why regulatory clarity matters for crypto investors
XRP’s Controversial Structure
Unlike Bitcoin or Ethereum (decentralized, mined), XRP is pre-mined:
- Total Supply: 100B XRP (no additional creation).
- Distribution: 80% held by Ripple Labs; 20% by founders.
Broader Implications
- Legal Precedents: SEC previously targeted firms like Block.One and Telegram for unregistered securities offerings.
- Market Impact: XRP is the third-largest crypto by market cap; Ripple’s 2019 valuation hit $10B.
FAQs
Q: Can I still withdraw XRP from Coinbase?
A: Yes, wallets remain functional for deposits/withdrawals.
Q: Why does SEC classify XRP as a security?
A: Centralized issuance and profit expectations mirror traditional securities.
Q: What’s next for Ripple?
A: Legal battles may redefine regulatory frameworks for similar assets.
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