Ripple Labs has faced significant setbacks since the Securities and Exchange Commission (SEC) filed a lawsuit against it last week. Now, it appears poised to suffer another Setback with top crypto exchange Coinbase looking to delist its XRP token.
Coinbase Cuts Bait
This week, Coinbase announced that it planned to suspend trading activities in XRP next month as its issuer, Ripple Labs, faces a lawsuit from the SEC. The company would suspend all XRP-related activity from January 19, although this could happen sooner.
Coinbase pointed out that the suspension won’t affect the upcoming Spark (FLR) token airdrop. The airdrop, launched by the Flare Network, has backing from Ripple Labs. Clarifying, Paul Grewal, Coinbase’s Chief Legal Officer, also explained:
“The trading suspension will not affect customers’ access to XRP wallets which will remain available for deposit and withdraw functionality after the trading suspension. We will continue to support XRP on Coinbase Custody and Coinbase Wallet.”
Coinbase’s delisting is the latest in setbacks that Ripple Labs will face since the SEC unveiled charges against it last week. In a filing with a federal court in Manhattan, the agency confirmed that it would charge the San Francisco-based firm for offering an unregistered security through its XRP token sale. The lawsuit essentially deemed the XRP token a security, with the SEC adding that Ripple had distributed the asset for “labor and market-making services.”
The agency also charged Brad Garlinghouse and Chris Larsen – Ripple’s CEO and co-founder, respectively – for failing to report personal XRP sales totaling about $600 million.
Ripple Labs Fights Alone
Garlinghouse and others at Ripple have been defiant against the SEC. In a blog post, the CEO pointed out that the SEC’s case is an assault against the crypto industry as a whole. The post appeared to have been a rallying cry, with Garlinghouse painting the case against the SEC as a harbinger for what could happen to all altcoins over the next year.
Sadly, the post had little effect as several names in the crypto space have begun distancing themselves from Ripple and its asset.
Yesterday, OKCoin, another top exchange, announced that it would suspend XRP deposits and trading in the wake of the suit. In a blog post, the exchange explained that this action was the best thing to do, given the circumstances. All XRP trading and deposits on the platform will be suspended on January 3.
Several other exchanges have announced that they would delist XRP. These include Bitstamp, CrossTower, OSL, and Beaxy. There is every indication that other top exchanges will join in soon.
Besides exchanges, top asset management firm Bitwise also announced last week that it would liquidate all XRP holdings from its Bitwise 10 Crypto Index Fund. Bitwise launched the fund in 2017 to provide institutional investors with access to several large-cap cryptocurrencies. It is unclear how much of the fund is XRP-denominated, but all of it is gone now.
Suddenly, Ripple is finding itself alone in a fight that could determine its future as a firm.