Following the US Securities and Exchange Commission’s official announcement that it was suing Ripple and its executives for selling unlicensed securities, a handful of small exchanges have started suspending and delisting XRP trading.
Meanwhile, the price of the asset has reacted negatively to the news. The former third-ranked cryptocurrency by market cap has dropped to 4th place, giving way for Tether. The price of XRP has also plunged from around $0.52 on Monday to less than $0.31 as of press time.
According to the US watchdog, Ripple unlawfully sold more than $1.3 billion worth of XRP. CEO Brad Garlinghouse has refuted these claims stating that XRP is a currency and not a security or investment contract.
In response to the possibility that the SEC wins the battle, several US-based exchanges have started delisting XRP. Beaxy, OSL, and CrossTower suddenly announced the removal or suspension of XRP trading.
Existing regulations demand that every company selling securities must register with the SEC. To avoid any run-ins with the law, these unregistered exchanges are rushing to delist the asset. To make matters worse, Bitwise Asset Management announced today that it had liquidated its position in XRP and diverted it into other portfolio assets.