eToro suspends XRP buying and selling within the US forward of the deliberate IPO

Two days after announcing plans to go public, Israel-based social trading platform and exchange eToro announced plans to suspend XRP trading for US clients.

With this, eToro follows the leadership of the large US exchange Coinbase, which has also stopped trading in the fourth largest cryptocurrency after plans to go public.

XRP is at the center of a recent lawsuit filed by the US Securities and Exchange Commission that alleges it is an unregistered security that Ripple has been selling illegally for years. The SEC is trying to reclaim more than $ 1.3 billion from the international payments company and its two top managers, CEO Brad Garlinghouse and Executive Chairman Chris Larsen.

An IPO requires SEC approval, so both eToro and Coinbase have ample reason to avoid XRP.

“In light of the recent SEC lawsuit against Ripple Labs, Inc., eToro … has decided to ban the purchase of XRP on the eToro platform and prohibit converting XRP into a customer’s eToro wallet,” said eToro in a blog post from December 31st. The ban begins January 3 at 12 p.m. EST.

Customers with existing XRP positions must close them with sell orders by January 24th at 12 noon EST. The company said:

“Currently, the above bans only affect US customers and not a customer’s ability to hold XRP in their eToro wallet.”

It added that “Customers, including US customers, will still be able to have XRP in their eToro wallet and that customers who still have XRP on the eToro platform after January 24th will transfer their XRP to an eToro wallet.” can… [or to] Any XRP wallet address not associated with eToro at any time. “

Another major US exchange, Binance US, announced on December 31 that it was delisting XRP. The US-based crypto asset trading platform associated with Binance, the world’s largest cryptocurrency exchange, will delist XRP starting January 13th.

Shortly after the regulator announced its action, a number of cryptocurrency exchanges began delisting the coin, starting with three small exchanges, followed by big players like Crypto.com and OKcoin. All of them will cease trading until mid-January.

While Coinbase was delisted within days of the SEC’s enforcement action, it may be too late for the company to avoid the consequences of selling a potentially unregistered security. As Modern Consensus reported yesterday, Coinbase was hit with a class action lawsuit on December 30th for $ 10 million for the sale of XRP. The plaintiff calls this a security that the company was not licensed to sell.

Industry expert Bruce Fenton, CEO of security tokenization company Chainstone Labs, described the delisting wave as a natural reaction from companies with US customers, as they could be accused of selling securities without a license.

Ripple downplayed the delistings in a recent statement – without specifically naming a name exchange – claiming that “the majority of our customers are not in the US and most of the XRP volume is traded outside the US.”

Comments are closed.