XRP price falls 24% in 24 hours as exchanges begin delisting

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Several exchanges have already halted XRP trading after the SEC’s lawsuit against Ripple was revealed.

XRP price fell 41% on Binance over the past three days as news of the lawsuit by the United States Securities and Exchange Commission against Ripple became apparent. As a result, several small exchanges have already halted XRP trading.

So far, three small exchanges, namely OSL, Beaxy and CrossTower have either temporarily stopped trading or removed XRP.

Daily XRP price chart (Coinbase). Source: TradingView.com

More exchanges may delist XRP

According to prominent lawyers in the cryptocurrency industry, exchanges that listed XRP are at risk if the token is deemed a security.

Hailey Lennon, a partner at Anderson Kill, said:

“You know who is at risk if XRP is considered a security? EVERY EXCHANGE THAT LISTS XRP.”

The SEC alleges Ripple of paying money to exchanges to permit the “buying and selling of XRP” on their platforms.

The official lawsuit filed by the SEC said that Ripple entered into agreements with at least 10 digital asset trading platforms. The lawsuit reads:

“In 2017 and 2018, Ripple also entered into agreements with at least ten digital asset trading platforms — none of which were registered with the SEC in any capacity, and at least two of which have principal places of business in the United States — providing for listing and trading incentives with respect to XRP. Ripple paid these platforms a fee, typically in XRP, to permit the buying and selling of XRP on their systems and sometimes incentives for achieving volume metrics.”

If XRP is officially deemed a security, Lennon noted that the 10 exchanges cited by the lawsuit are likely to see the biggest risk.

Brad Garlinghouse, the CEO of Ripple, said he would “aggressively fight” and “prove our case” with co-founder Chris Larsen.

Garlinghouse emphasized that he has the option to individually settle with the SEC, but has decided not to take that route. Hence, the final court decision in the U.S. is needed to officially conclude whether XRP is or is not a security.

Some exchanges will likely halt trading in the foreseeable future until the formal court decision gets released. OSL, an over-the-counter and cryptocurrency exchange in Asia, said:

“In light of the U.S. Securities and Exchange Commission’s enforcement action against Ripple Labs Inc. and two of its executives, we have suspended all $XRP payment in and trading services on the OSL platform, effective immediately and until further notice.”

XRP price at risk

From a technical standpoint, traders say that XRP is in a “do or die” situation where it would have to bounce strongly at the current level at around $0.35 or face more downside.

Below $0.35, the chances of a bigger drop to early 2020 levels increase. Though a relief rally should also not be ruled out.

Alex Saunders, a cryptocurrency trader, said XRP remains risky for traders until the regulatory conflict with the SEC is resolved. He wrote:

“With a plethora of coins offering enormous upside. It’s ludicrous to emotionally attach yourself to $XRP now they are being sued by the SEC. Exchanges will be delisting & financial services industry won’t dare touch it until resolved. Good investors admit things changed & move on.”

The uncertainty around XRP has also been reflected by a spike in social media activity surrounding the cryptocurrency. At the same time, the sentiment around XRP has dropped to its second-lowest recorded level in history, according to data from TheTie.

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