Multiple Crypto Firms Distance Themselves From Ripple

December 29, 2020 01:31 PM
Ripple Coin

[node:field_image:alt]

 

CRYPTO MOVERS AND PRICES

 
 

Ripple (XRP) remains in focus after Coinbase announced they would suspend trading of the asset. The top 10 is otherwise marginally lower with Polkadot (DOT) and Cardano (ADA) the outliers, both up in the range of +10%.

Crypto Story of the Day

On December 22, the U.S. SEC revealed charges against Ripple (XRP) for conducting an unregistered securities offering by selling XRP.  We review the crypto trading and investment firms that have since distanced themselves from the asset via liquidations and delistings.

Since Ripple CEO Brad Garlinghouse revealed the impending case, which was made public by the SEC on December 22, a number of trading venues began to disassociate themselves with the asset. The first was Hong Kong-based and regulated exchange OSL which delisted XRP on the 23rd. Bitwise followed by liquidating its XRP holdings that were part of its Bitwise 10 Crypto Index Fund. On Christmas, Bistamp halted XRP trading for U.S. customers, preceded by lesser-known U.S. exchanges Beaxy and WatchTower also delisting the asset.

The latest delisting of XRP comes from Coinbase and OKCoin, which announced the move via blog posts yesterday. Coinbase wrote that XRP trading would be fully suspended on January 19 for all users. Users’ XRP wallets on the exchange will remain accessible and the asset will continue to be supported via Coinbase Custody and Coinbase Wallet. XRP’s steep drop following December 21 was interrupted by a sharp upwards retracement that took its market cap from USD 11.9 billion to USD 15.6 billion. Since then, XRP continued to see declining prices, steadying around a USD 13 billion market cap, a value the asset largely held from this summer until it began to rally in November.

There appears to be 3 categories of “delisters” among the parties that have done so thus far. First, those that must delist. It’s quite clear that U.S.-based crypto exchanges without any securities license cannot offer XRP. Assuming the charges stick, doing so would be akin to launching an equity on a crypto trading platform and a clear violation.
 
Second, firms such as OTC desks or asset management businesses are mostly citing a “lack of clarity” as a justification for delisting. Contrary to the history of crypto, more and more venues have an extreme interest in staying onside with more present regulators and clearly some businesses have chosen the conservative approach. 

Finally, it appears that some businesses simply don’t want to list the asset anymore because they no longer consider it cryptocurrency, which may contradict their mandate or at least their intentions. There’s little precedent for this. The last time there were high profile delistings of an asset was BSV, which was removed from platforms such as Binance and Kraken due to personal gripes that exchange executives had with some BSV proponents. Ultimately BSV recovered, but the decline in XRP has already far exceeded that episode.  

Please sign up for a free trial of FRNT Financial Morning Note.

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets. You can subscribe to FRNT Financial Morning Note at https://www.frnt.io/morningnote