Bitstamp becomes first major cryptocurrency to remove XRP after SEC allegations that token was sold as an unregistered security.
Bitstamp joins many exchanges that are removing XRP
One of the most valuable cryptocurrencies, XRP, is in free fall after the U.S. stock market Bitstamp cryptocurrencies announced that it is ceasing XRP trading and deposits for all U.S. customers as of January 8, 2021.
The decision comes in response to a longstanding U.S. Securities Exchange Commission (SEC) filing against Ripple Labs for allegedly selling unregistered securities.
U.S. users will be able to withdraw XRP from cryptocurrency exchanges even after trading stops, 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 the sale of the XRP token, while it should have been registered as collateral.
XRP suffers from extreme volatility in recent years
A digital currency that is issued and partially managed by Ripple , fell by 7,4% December 26, The day after Bitstamp's announcement. XRP lost 51% its value since early December, when it was USD 0.61.
Since reaching record levels USD 3.84 in January 2018, the coin has undergone a strong devaluation over the past two years, reaching just USD 0.29 December 27.
Some other exchanges cryptocurrenciessuch as OSL, Beaxy, CrossTower i B2C2, have removed XRP from their platforms to avoid legal action on behalf of US regulators. More industry players are expected to take similar action before the case is finally resolved.
December 23 manager Bitwise cryptocurrencies announced that it has liquidated XRP worth 9.3 million USD in its crypto index fund and redistributed the amount to other assets.
With this in mind, analysts are negative on the coin's value and are unsure of its long-term survival.
XRP loses to rival bitcoin
In addition, the cryptocurrency once ranked third in terms of market capitalization is losing ground to Bitcoin (BTC) and helped its rival get closer to 70% market dominance. The price of the world's largest cryptocurrency by market capitalization reached $28220.50 in on December 27.
In early December, Ripple said it would wait for upcoming cryptocurrency regulations from Biden administration, before making a final decision on his plan to leave the US. Ripple was reportedly unhappy with the regulatory climate at home and was considering relocating to a foreign destination, most likely to Japan or Singapore.