Cryptocurrencies continue to make and break fortunes every day, and one such significant incident was seen today when the market value of XRP fell 31%. This downfall was followed by suspension of trading services through Coinbase after an SEC complaint against Ripple Labs.
Losing one-third of its value is a big loss for this cryptocurrency and for its investors. The people who were holding this cryptocurrency as an asset are now in extreme loss of 31% as a whole. Coinbase clearly announced that it is going to suspend all its trading services for XRP after mid-January. XRP fell last time by 28%, and now it had the biggest downfall in its entire history. XRP increased in its value significantly this November when it hit its highest by taking advantage of a weaker US dollar position during the epidemic.
The United States Securities and Exchange Commission mentioned on December 23rd that developers of XRP had personal gains by offering unregistered retail of their cryptocurrency. The organization views this cryptocurrency as security and not as a digital asset assuming it comes under its jurisdiction. Due to this lawsuit, Coinbase announced that it has imposed limitations on trading this cryptocurrency and will suspend the complete trading on it by January.
The limitations imposed by Coinbase to reduce the trading of XRP are keeping in view that exchanging it with other cryptocurrencies will ultimately lead to a loss for the exchange as now many people want to sell their XRP. Being the biggest exchange, Coinbase clarified to its customers that their existing XRP wallet reserves will not be affected. They will be able to deposit and withdraw them after trading suspension so that they do not worry about the cryptocurrency being freeze and their investment being stuck.
The CEO of Ripple Labs company and its co-founder were mentioned in the lawsuit, and the only thing that they said in their blog was that there is no clarity in the lawsuit that XRP falls under the jurisdiction of SEC or not. They deny their product of being security as they treated it always as a cryptocurrency, so they believe that SEC has no concern with it.
Initially, Ripple Company did not provide any comment on the lawsuit and downfall of their cryptocurrency. Even if the company manages to win the case against the SEC, it has lost its value at least temporarily in the market. The investors have also lost interest in the company because previous investors have also filed cases against them for not providing proper documentation and evidence of sales that they claim.