XRP is in trouble following SEC lawsuit against Ripple.
BItstamp is the largest crypto exchange to block US customers.
The third largest cryptocurrency is struggling to maintain its price with these claims
The popular BItstamp exchange has announced that it will halt trading in Crypto Code app for US clients. This follows an announcement from the SEC that the regulator is pursuing legal action against Ripple Labs .
XRP haters continue to feast on as another crypto exchange stops trading in the coin. After Ripple revealed that it was facing a lawsuit by the US Securities and Exchange Commission (SEC) for illegal sales of securities, the price of XRP fell.
Soon after, a number of exchanges started removing XRP from their quotation or halting trading for US clients. The exchanges OSL, CrossTower and Beaxy have all stopped trading in XRP. The Bitwise crypto hedge fund has removed the coin from its wallet. All cited the SEC lawsuit as the reason.
Bitstamp then threw in the towel and announced the end of trading in XRP for its US clients. Bitstamp is the largest exchange to report the news to date.
Following the recent SEC filing alleging that XRP is a security, we will be halting trading and filing of XRP for all US clients as of January 8, 2021. Other countries are not affected. Read more:
On their website , the company announced that it will stop all trading and depositing for XRP on January 8, 2021 at 9 p.m. UTC. US customers will then be able to withdraw XRP, while citizens of other countries will not be affected.
Bitstamp, which has a daily trading volume of $ 500 million , says it will monitor the situation and adjust accordingly.
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Ripple Labs has announced that they expect a trial by the SEC the day before authorities officially release the information. Authorities accuse CEO Brad Garlinghouse and co-founder Chris Larsen of carrying out an „ongoing“ illegal sale of securities .
In the United States, securities must be registered with the relevant authorities, usually the SEC, to be traded publicly. Among the non-securities assets are property and money. Ripple Labs insists that XRP, which is designed to streamline money transfers, is a currency, not a security.
For its part, when the Fed comments on the status of a cryptocurrency, it generally designates it as property. Some frustrations arise with phenomena like Proof of Stake, in which small blocks of rewards might be considered separate taxable events. In the US Congress , there have been some efforts to try to smooth inconsistencies.
In the past, the US government has suggested that it would not consider Bitcoin (BTC) and Ethereum (ETH) to be securities. In 2019, Larsen and Garlinghouse wrote an open letter pleading with the U.S. government to slow down regulation.