In the midst of the cryptocurrency market rally, XRP (Ripple) — the third-largest cryptocurrency by market cap — faced an unexpected trading halt.
The Suspension Announcement
On December 29, cryptocurrency exchange Coinbase published a blog post stating it would suspend XRP trading due to the U.S. Securities and Exchange Commission (SEC)'s recent legal action against Ripple Labs, the company behind XRP. The phased suspension timeline was as follows:
- December 28, 2020 (PST): Trading restrictions initiated.
- January 19, 2021 (PST): Complete trading suspension.
Paul Grewal, Coinbase’s Chief Legal Officer, clarified that users would retain access to their XRP wallets for deposits and withdrawals even after the suspension. The platform also continued supporting XRP on Coinbase Custody and Coinbase Wallet.
👉 What other exchanges halted XRP trading?
Broader Exchange Reactions
Coinbase wasn’t the first to act:
- Bitstamp: Announced on December 5 that it would suspend XRP trading for U.S. clients by January 8, 2021.
- OKCoin: Followed suit, pausing XRP trades and deposits from January 4, 2021, until further notice.
Market Impact
The suspensions triggered a sharp XRP price decline:
- Price: Dropped to $0.23 (24-hour decline: 17.57%).
- Market Cap: Fell to $233.6 billion.
XRP had surged 180% since late October, peaking near $0.68, but the SEC lawsuit reversed gains.
The SEC’s Legal Challenge
On December 22, the SEC accused Ripple Labs of selling unregistered securities via XRP. Key arguments:
- Centralized Issuance: Unlike decentralized cryptocurrencies (e.g., Bitcoin), XRP was created and distributed by Ripple’s founders and their company.
- Security Classification: The SEC argues XRP should be regulated as a security, not a currency, due to its corporate-backed structure.
A court ruling favoring the SEC could redefine XRP’s legal status, complicating its use as a currency.
👉 How does the SEC’s case affect crypto regulations?
Coinbase’s Background
Founded in 2012 and headquartered in San Francisco, Coinbase is a top-tier global crypto platform with:
- 35+ million users across 100+ countries.
- A confidential SEC filing for a potential IPO, which may make it the first publicly traded crypto exchange.
FAQ
1. Can I still withdraw XRP from Coinbase after the suspension?
Yes. Wallet access remains intact for deposits/withdrawals.
2. Why did exchanges suspend XRP trading?
Due to the SEC’s lawsuit alleging XRP is an unregistered security.
3. Will XRP’s price recover?
Market sentiment hinges on the lawsuit’s outcome. A favorable ruling could restore confidence.
4. How does this affect other cryptocurrencies?
The case sets a precedent for how regulators may treat similarly structured tokens.
5. Is XRP decentralized like Bitcoin?
No. XRP’s issuance is controlled by Ripple Labs, making it centralized.
6. What’s next for Ripple Labs?
Ripple plans to contest the SEC’s claims, arguing XRP is a currency, not a security.