Bitstamp will prohibit the trade of XRP by its US customers next month. The step follows the case filed by the SEC against Ripple. This comes after XRP’s price plummeted as news of an SEC lawsuit leaked.
Bitstamp is the most recent and the first large exchange to discontinue trade of XRP, a cryptocurrency whose status will be decided by the results of a proposed SEC case against its progenitors at Ripple.
This week, the US Securities and Exchange Commission lodged a complaint against Ripple, the payment firm founded by XRP’s founders.
Ripple’s Legal Woes
The SEC says that since 2013, Ripple has earned $1.3 billion in unregistered sales securities and continues to distribute them unlawfully as it regularly sells off chunks of the 6 billion XRP kept in escrow accounts. It sells the currency like a central bank.
Litigation against Ripple Laboratories, the corporation that developed XRP, as well as co-founder Christian Larsen and incumbent CEO Brad Garlinghouse, was today brought by the US Securities and Exchange Commission.
Ripple disputes the charges, but as it and the regulator duke it out in court, XRP shares have been liquidated by many crypto exchanges and financial firms and coin trade stops.
Companies such as Bitstamp, a large European exchange, have delisted XRP. Bitstamp revealed yesterday that it will temporarily stop allowing US customers to trade the coin.
Since the delisting of XRP on Bitsamp, the price of XRP dropped to $0.29, reversing a short bounce after the initial SEC announcement, which had bumped up the price from $0.26. A week earlier, XRP traded at around $0.6; in the last week, the price was down by 48 percent.
Bitstamp is not the only exchange to delist XRP. The cryptocurrency has been delisted by crypto exchanges Beaxy, CrossTower, and OSL. Bitwise has liquidated all XRP from its portfolio, and two of the main crypto trading desks, Hop Trading and Galaxy Digital, have recently discontinued making XRP markets.
What is Bitstamp?
Bitstamp is a Luxembourg-based crypto exchange. It facilitates trade between Bitcoin, fiat currency and other cryptocurrencies. It allows for deposits and withdrawals of USD, EUR, GBP, blockchain, ethereum, litecoin, bitcoin currency, XLM, Connect, OMG Network, USD Coin or PAX.
The business was founded as a European-focused competitor to Mt. Gox, the then influential bitcoin exchange. Although the company deals in US dollars, it only allows free fiat money deposits through the Single Euro Transfers Region of the European Union, a system for exchanging money between European bank accounts.
Bitstamp provides an API to enable consumers to view and manage their accounts using custom apps.