XRP worth drops 24% in 24 hours as exchanges start delisting
Binance's XRP price fell 41% in the past three days as news of the SEC lawsuit against Ripple broke. As a result, several small exchanges have already ceased XRP trading.
So far, three small exchanges, namely OSL, Beaxy and CrossTower, have either temporarily ceased trading or removed XRP.
The daily XRP price chart (Coinbase). Source: TradingView.com
Other exchanges can delist XRP
Exchanges that list XRP are considered XRP at risk, according to prominent lawyers in the cryptocurrency industry.
Hailey Lennon, partner at Anderson Kill, said:
“You know who is at risk when XRP is viewed as a security? EVERY EXCHANGE LISTING XRP. "
The US SEC claims that Ripple paid money on exchanges to enable "buying and selling of XRP" on their platforms.
The SEC's official lawsuit said Ripple had entered into agreements with at least ten digital asset trading platforms. The lawsuit reads:
“In 2017 and 2018, Ripple also entered into agreements with at least ten digital asset trading platforms, none of which were registered in any form with the SEC, and at least two of which have US headquarters with listing and trading incentives relating to XRP. Ripple paid these platforms a fee, usually in XRP, to allow the buying and selling of XRP on their systems and sometimes incentives for achieving volume metrics. "
If XRP is officially classified as a security, Lennon notes that the ten exchanges named in the lawsuit are likely to pose the greatest risk.
And I suspect they would start with these 10https: //t.co/5W6btHERmM
– Hailey Lennon (@HaileyLennonBTC) December 22, 2020
Brad Garlinghouse, the CEO of Ripple, said he will "fight aggressively" and "prove our case" with co-founder Chris Larsen.
Garlinghouse emphasized that he had the opportunity to coordinate with the SEC individually, but had decided not to take this route. Hence, the final US court ruling is required to officially decide whether or not XRP is a security.
Some exchanges are likely to cease trading anytime soon until the formal court ruling is released. OSL, an OTC and cryptocurrency exchange in Asia, said:
"Given the enforcement actions taken by the Securities and Exchange Commission against Ripple Labs Inc. and two of its executives, we have suspended all XRP payment and trading services on the OSL platform with immediate effect and until further notice."
XRP price at risk
From a technical standpoint, traders say XRP is in a do-or-die situation where it should bounce heavily or face more downside moves at the current level around $ 0.35.
Below USD 0.35, the chances of a stronger decline to the level of early 2020 increase. An auxiliary rally should not be ruled out either.
Ripple is in a bounce or die situation – flirt with the support of the cloud. $ XRP pic.twitter.com/4t0VpM3qXQ
– yTedd (@TeddyCleps) December 23, 2020
Alex Saunders, a cryptocurrency trader, said XRP would remain risky for traders until the regulatory conflict with the SEC is resolved. He wrote:
“With an abundance of coins that offer an enormous upward trend. It's ridiculous to get emotionally attached to $ XRP now that they're being sued by the SEC. The exchanges will be delisted and the financial services industry won't dare touch them until it's resolved. Good investors admit that things have changed and continue to do so. "
After Ripple announced an incoming SEC lawsuit yesterday, #XRP tweet volume hit its highest level since January 5, 2018. Sentiment on XRP was the second lowest ever recorded by @TheTIEIO.
The most common words used in XRP tweets include securities, lawsuit, and sell. pic.twitter.com/us6r0mzTTs
– Joshua Frank (@Joshua_Frank_) December 23, 2020
The uncertainty surrounding XRP has also been reflected by a surge in social media activity related to the cryptocurrency. At the same time, the mood around XRP has fallen to the second lowest level in history, according to TheTie.