- Three cryptocurrency exchanges have stopped trading XRP tokens.
- This comes on the heels of the SEC filing a $1.3 billion lawsuit against Ripple and two of its executives.
- These exchanges have paused trading even though the lawsuit has only just been announced.
Three crypto exchanges—CrossTower, Beaxy, and OSL—have halted the trading of tokens after the US Securities and Exchange Commission (SEC) officially filed a $1.3 billion lawsuit against Ripple.
“Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice,” OSL wrote today.
As Decrypt reported, the SEC’s lawsuit was filed not only against Ripple itself but its co-founder Christian Larsen and CEO Brad Garlinghouse as well. The lawsuit alleges that Ripple has raised $1.3 billion in unregistered securities offerings since 2013.
"The defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws," the SEC said in a press release.
If the SEC wins its case against Ripple and the court deems XRP unregistered securities, this will present a serious risk to every crypto exchange that currently lists the token, experts noted.
“I think any crypto exchange who doesn’t delist XRP this week is out of their mind. If the SEC says it’s a security you’d be crazy to list it without a license,” said Bruce Fenton, CEO of Chainstone Labs, today.
Thus, to mitigate these risks, crypto exchanges—at least smaller ones for now—have begun delisting XRP.
“CrossTower’s listing committee evaluates tokens along multiple dimensions. One of the criteria is whether an asset is a security. Given the uncertainty regarding XRP’s status, CrossTower has decided to delist XRP,” CrossTower president Kristin Boggiano told Coindesk.
And the price of XRP has felt the pressure. At press time, the token is trading at around $0.31—down 32.25% on the day, according to CoinMarketCap. The token has also lost its position as the 3rd largest crypto by its market capitalization, sliding down to the fourth place.