After news of a lawsuit against Ripple broke out, some crypto trading platforms at a small level decided to stop offering services for XRP. But today, Bitstamp has become the first major cryptocurrency exchange to stop trading of the fourth-biggest cryptocurrency.
Only for US Customers
According to Bitstamp’s announcement, the exchange will halt trading services for only US users. “In light of the SEC’s recent filing alleging XRP is a security, we are going to halt XRP trading and deposits for all US customers on January 8, 2021,” it stated.
However, the XRP withdrawals will not be affected by this. “Our US customers will still be able to withdraw XRP from Bitstamp. Customers from other countries are not affected,” the announcement reads.
So, it means that it is not halting the coin deposits urgently but will implement it by January 8. What’s more, the new policy of shutting down deposits will be implanted only for US customers as it is very risky to offer registered security for trading. It is also revealed in the exchange’s blog post that it “will closely follow the unfolding situation and continue to adapt accordingly.”
On Tuesday, the San Francisco-based Ripple firm was challenged by the Securities and Exchange Commission of the United States. As per the lawsuit of SEC, the executives of the blockchain-based payment processor were guilty of selling securities worth approximately $1.3 billion. The executives include co-founder Chris Larsen and CEO Brad Garlinghouse.
Soon after the filing of the lawsuit, small exchanges, such as Beaxy and CrossTower, terminated all trading facilities of XRP. A prominent exchange in the Hong Kong named OSL has also stopped trading of the cryptocurrency due to legal uncertainty around the coin.
After the news of SEC’s lawsuit, the space for XRP in the market has become narrow as many traders and investors dumped coin which resulted in a loss of value as a result of enormous selling.
Over the replacement of the SEC chairman from Jay Clayton to a crypto-friendly personality Elad Roisman, the crypto community responded positively and helped XRP in the price rebounding. But lawyer Jake Chervinsky rejected this narrative and stated:
“It’s extremely unlikely that changes in SEC leadership will have any impact on the Ripple case. Given Comm’r Peirce’s conspicuous silence, I’d guess the vote was unanimous in favor of filing.”