Three small cryptocurrency exchanges delisted XRP on Dec. 23 after the U.S. Securities and Exchange Commission filed a lawsuit claiming the fourth-largest cryptocurrency is an unregistered security sold by American blockchain giant Ripple.
As Modern Consensus reported yesterday, Ripple CEO Brad Garlinghouse vowed to fight the case aggressively, harshly criticizing the SEC over its litigation and accusing it of stymying innovation and taking decisions that benefit China.
Regardless of the suit’s eventual outcome, Bruce Fenton, the CEO of security tokenization firm Chainstone Labs commented in a Dec. 23 tweet: 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.”
Crypto trading platform OSL apparently agreed, announcing in a tweet earlier today that it “suspended all #XRP payment in and trading services” immediately and until further notice because of the SEC’s action.
Chicago-based cryptocurrency exchange Beaxy followed suit, announcing yesterday:
“The SEC has charged Ripple with conducting an unregistered security sale. Due to this, Beaxy has halted trading for XRP pending further news. XRP withdrawals will remain enabled until further notice.”
Lastly, New Jersey-based cryptocurrency exchange CrossTower decided to delist XRP. The firm’s president, Kristin Boggiano, explained in a statement shared with industry news outlet Coindesk that its listing committee “evaluates tokens along multiple dimensions” and XRP did not meet one of its criteria:
“One of the criteria is whether an asset is a security. Given the uncertainty regarding XRP’s status, CrossTower has decided to delist XRP.”
Hailey Lennon, a partner at corporate law firm Anderson Kill’s blockchain and cryptocurrency division, said earlier today that every exchange that lists XRP is at risk if it is found to be a security.
Stephen Palley—also a partner at Anderson Kill—briefly explained:
“If XRP is a security it means that exchanges who are not registered broker dealers can’t list it.”
Palley also pointed out that Ripple entered into agreements with at least 10 cryptocurrency exchanges, and often paid them in XRP for listing the assets. Lennon suggested that law enforcement would start taking action against those exchanges first.
As Modern Consensus reported yesterday, Ripple CEO Brad Garlinghouse heavily criticized the SEC, accusing it of trying to pick winners among innovators and taking decisions that benefit China.