Bitwise has liquidated its XRP position from its institutional crypto index of ten cryptocurrencies.
Three other cryptocurrency exchanges—OSL, Beaxy, and CrossTower—have also halted XRP trading after SEC charges Ripple for an “ongoing” sale of illegal securities.
XRP Driven Out of US
Exchanges have begun halting XRP trading in light of the SEC’s lawsuit against Ripple. These exchanges’ users can withdraw XRP from their accounts, but trading is suspended until there is more clarity to the situation.
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.https://t.co/EXJJEHMawn
— OSL (@osldotcom) December 23, 2020
“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws.”
The SEC’s legal filing has accused Ripple and two of its founders, Chris Larsen and current CEO Brad Garlinghouse, of participating in the “ongoing” sale of unregistered securities.
Investors are hopeful of a bull run if the lawsuit gets settled with a fine, similar to others in the past, for example, EOS. However, some experts have also stated that the lawsuit against Ripple is far graver.
this isn’t remotely similar to the EOS/B1 case. the SEC is going for the jugular here.
— nic carter 🎄 (@nic__carter) December 22, 2020
The case might run for months or even years, and U.S. exchanges may delist XRP to safeguard themselves from related lawsuits.
If XRP is deemed a security, exchanges would require a license from the Financial Industry Regulatory Authority (FINRA). Currently, most of these avenues are operating as Money Transmitter Businesses (MSBs).
The liquidity of the cryptocurrency will drain in mere months if the above situation plays out. XRP price plummeted 36% to lows of $0.3 after the court filing was released, sliding down one spot to become the fourth-largest cryptocurrency by market capitalization.