In the midst of cryptocurrency market rallies, XRP—the third-largest cryptocurrency by market cap—has faced a sudden trading suspension across major exchanges.
The Suspension Timeline
On December 29, Coinbase announced via its official blog that it would suspend XRP trading following recent actions by the U.S. Securities and Exchange Commission (SEC) against Ripple Labs, the company behind XRP. The phased suspension began on December 28, 2020 (PST), with complete trading halted by January 19, 2021.
Paul Grewal, Coinbase’s Chief Legal Officer, clarified that users would retain access to XRP wallets for deposits and withdrawals even after the trading suspension. The platform also continues to support XRP on Coinbase Custody and Coinbase Wallet.
Industry-Wide Impact
Coinbase isn’t the first exchange to take this step:
- Bitstamp: Paused XRP trading for U.S. clients starting January 8, 2021.
- OKCoin: Suspended XRP trading and deposits on January 4, 2021 (until further notice).
👉 How does XRP’s suspension compare to other crypto regulations?
Market Reaction
XRP’s price plummeted by 17.57% within 24 hours, dropping to ~$0.23. Its market capitalization fell to $23.36 billion.
Historical Context
- XRP had surged 180% since late October 2020, peaking at ~$0.68.
- The crash followed the SEC’s lawsuit against Ripple Labs on December 22, accusing the company of selling unregistered securities via XRP.
Key Concerns About XRP
- Centralization: Unlike Bitcoin, XRP is pre-mined and controlled by Ripple Labs.
- Legal Status: The SEC argues XRP should be classified as a security, not a currency—a ruling that could redefine its usability.
Broader Implications
- Coinbase’s IPO Plans: The platform’s SEC filing for a public listing could make it the first major crypto exchange to go public.
- Regulatory Precedent: This case may set standards for how other cryptocurrencies are treated under U.S. law.
FAQ Section
Q: Can I still withdraw XRP from Coinbase after the suspension?
A: Yes. Wallet functionalities remain active for deposits/withdrawals.
Q: Why is the SEC targeting XRP?
A: The SEC alleges XRP qualifies as an unregistered security due to Ripple Labs’ centralized control.
Q: Which other exchanges have suspended XRP trading?
A: Bitstamp and OKCoin announced similar suspensions earlier.
Q: Will XRP’s price recover?
A: Market sentiment depends heavily on the lawsuit’s outcome and broader regulatory clarity.
👉 Explore how leading exchanges handle regulatory shifts
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