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Coinbase Will Likely Delist XRP Token as SEC Files Lawsuit Against Ripple

The United States Securities and Exchange Commission’s (SEC) lawsuit against Ripple may be enough to force major exchanges, particularly Coinbase to delist the XRP token while the “unregistered securities” case remains unresolved—which would ultimately send the crypto’s price falling to new lows before the parties even enter a courtroom.

Before Ripple Labs co-founder and CEO Brad Garlinghouse even get the chance to defend the XRP token against the allegations of the SEC, the open case against XRP may be enough to force major exchanges like Coinbase, with its 3 million verified users, to delist the token in the meantime.

The United States Regulator officially filed a lawsuit against Ripple Labs Inc., naming co-founder Chris Larsen and CEO Brad Garlinghouse as defendants in the suit, for the sale of unregistered “digital asset securities” offering through which $1.3 billion was raised.

Ripple CEO Brad Garlinghouse made an open announcement yesterday that the SEC was going to move forward with its lawsuit against Ripple. Ever since the XRP token has plummeted in price.

XRP price is currently down nearly 20% since the announcement and is trading at around $0.37 at the time of writing, however, another seemingly unrelated event will most likely cause an even more dramatic price drop in the coming days—Coinbase, the largest crypto exchange in the US has just filed for an IPO and will not want to draw the ire of any regulators at this time.

Coinbase Will Delist XRP

Should Ripple be fined and XRP token ruled as security, this may cause the token to be delisted from certain cryptocurrency exchanges and inhibit its adoption—it is very unlikely that Coinbase will wait for the result of the SEC’s suit against Ripple Labs.

Announced on Dec. 18, the long-awaited Coinbase Initial Public Offering (IPO) has finally been filed and now awaits the review and approval of the Securities and Exchange Commission (SEC) before the filing will be made public.

As the SEC ultimately holds the fate of Coinbase crypto exchange’s vision of going public in its hands, there is little to no chance that Coinbase will oppose the SEC on the issue of XRP.

As one crypto analyst said on Twitter, Coinbase will likely be forced to delist XRP long before the SEC and Ripple go head to head, which could see the XRP price tank.

“Next thing that WILL happen is Coinbase delisting $XRP – they have no choice but to delist. When that happens, Ripple will sink faster than the Titanic.”

The analyst explains that crypto exchange operators like “Coinbase are generally not allowed to offer assets to their clients that the SEC deems to be securities.” Further, the analyst expects that if Coinbase doesn’t delist, the SEC is likely to bring criminal charges against the company for fraudulently offering and selling unregistered securities. In addition, Coinbase may be liable to investors who were sold XRP through the exchange to recoup their losses.

Should the most recognizable name in crypto in the United States delist the third most popular cryptocurrency in Ripple’s XRP token, the price plunge and sell of would be catastrophic. And at this point it does appear all but inevitable that Coinbase will have to delist XRP.

XRP One Last Pump Conspiracy

On November 13 Flare Networks, which is a smart contract utility fork of XRP, announced that it would be dropping more than 45 billion of its native Spark token on December 12 in “The Spark Airdrop Program.”

The Spark program benefitted anyone owning Ripple (XRP) tokens and participating in the airdrop up to the snapshot on Dec.12 would award XRP holders Spark tokens on a 1:1 ratio. Ripple’s XRP token saw a price surge of around 165% for the year, with most of its price gains coming over November from the time of the announcement.

Following the airdrop, the XRP price began to fall. Currently, with the impending suit by the SEC against Ripple, many on Twitter are questioning how long founder Brian Larsen and CEO Brad Garlinghouse have known it was coming, and some are questioning if the Spark program was an elaborate plot to cash out.

Lark Davis, known in the crypto community as the Crypto Lark, floated the idea earlier today. He tweeted:

“What if the spark airdrop was orchestrated for one last pump of #xrp before the SEC filed suit. How long has Brad known this is coming?”

While the comments were perhaps tongue-in-cheek, others added fuel to the conspiracy and even went as far as to allege Ripple may be planning to transition from XRP completely.

“What if SEC gave time to roll this out to XRP holders before filing suit. Maybe Ripple plans to use FLR instead of XRP in their products in the future. Maybe they’ll burn their escrow & part ways with XRP. Maybe Maybe Maybe. Judging by all of the execs that left they’ve known.”

There remains little more than speculation in this regard, but as the SEC goes after Ripple and the XRP token, expect the price to continue falling until a resolution is reached – but by then it may be too late.

Grayscale Will Dissolve XRP Trust In Reaction to SEC Lawsuit Against Ripple

Institutional-grade digital asset firm Grayscale has announced it will dissolve its XRP Trust as the United States Securities and Exchange Commission (SEC) pursues its lawsuit against Ripple—accused of selling unregistered securities.

The move comes just days after Grayscale announced the liquidation of XRP positions from its from is Digital Large Cap Fund.

In a press statement released on Jan. 13, Grayscale specifically cited the decision by the SEC to file suit against Ripple, a legal action which began in late December as the US regulator alleges that the XRP token is an unregistered security.

In the statement on Wednesday, Grayscale announced:

“In response to the SEC’s action, certain significant market participants have announced measures, including the delisting of XRP from major digital asset trading platforms, resulting in the Sponsor’s conclusion that it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.”

According to Grayscale Investments, the cash proceeds from the liquidated XRP Trust will be distributed to Trust shareholders. The digital asset firm added:

“In connection with the dissolution, the Sponsor has liquidated the Trust’s XRP and intends to distribute the net cash proceeds to Trust shareholders, after deducting expenses and providing appropriate reserves and subject to any applicable withholding. The Trust will terminate following distribution of the net cash proceeds.”

As XRP gains a bad rep from SEC, exchanges back away

Currently, the SEC’s lawsuit against Ripple has hindered XRP operations in the United States, as many cryptocurrency exchanges have moved to delist the token in fear of the repercussions the lawsuit may mean for their platform. Major exchanges that have chosen to halt XRP trades include Coinbase, Bitstamp, and Binance US.

While some have been quick to react to SEC’s lawsuit, other cryptocurrency exchanges have decided to wait for the outcome of the ongoing suit before removing XRP entirely from their platforms. Kraken crypto exchange seems to be among the handful of leading US-based exchanges to have adopted the stance of “wait and see,” as XRP trades are still available on their platform. Ripple’s first pre-trial court date to address SEC allegations over unregistered securities is set for February 22.

The XRP price is currently trading at $0.29 according to CoinMarketCap.

Who Will Enforce SEC Lawsuit

The fact that the Ripple lawsuit will be passed onto the next administrative figure leading the Enforcement Division of the SEC means that XRP’s outcome remains fairly uncertain. The lawsuit was handed out as the SEC’s chairman, Jay Clayton, was exiting the Commission in December. That has been heavily criticized by Ripple’s CEO, who blasted the SEC for deciding to sue at a time when many officials were departing as part of the presidential transition.

XRP is not a Security: Former CFTC Chair Chris Giancarlo Says

Christopher Giancarlo, the former Chairman of the Commodity Futures Trading Commission (CFTC), has shared his thought on the status of XRP Coin as the legal brawl between Ripple Labs and the Securities and Exchange Commission (SEC) rages on.

While appearing in an interview on Fox Business, Giancarlo said he believes XRP does not qualify as security as the SEC is alleging, a claim made based on earlier research he has done as the chairman of the CFTC.

The confusing designation of XRP as unregistered security remains the crux of the ongoing $1.3 billion legal war that has led many to be making permutations per related digital currencies that the SEC has cleared.

The commission has ruled that both Bitcoin (BTC) and Ethereum (ETH) are commodities and are not bounded by securities laws, a move that has won XRP, the favour of many public observers, who could not point out the difference between how XRP made its emergence and that of Ethereum as both involved Initial Coin Offerings (ICOs).

When asked if he thinks the SEC will go after Ethereum if the case with Ripple goes in the commission’s favour, Giancarlo said a likely move on Ethereum crackdown will set a difficult legal precedent, but that he could not comment further on ongoing investigations or any prospective one for that matter.

The present SEC Chairman, Gary Gensler, inherited the current lawsuit from his predecessor, Jay Clayton. What is, however, confusing to Giancarlo was that the SEC and CFTC under his leadership and that of Clayton had earlier come to the conclusion that XRP was not a security back in 2019. What later informed the commission’s plans to go after XRP and Ripple was largely unknown.

There is no indication whom the current case will favor between the SEC and Ripple Labs, however, the blockchain payments company seems to be making a lot of headway in its defense as many consider the market regulator’s case to be weak.

Legal Battle between Ripple Labs and SEC Seek End Game

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Ripple’s legal battle with the US Securities and Exchange Commission (SEC) has entered the summary judgment phase after both parties submitted their respective motions.

On Sunday, September 18, Ripple Defense attorney James Filan informed the crypto community about these submissions via Twitter social media.

Both Ripple and SEC filed motions for summary judgment in the Southern District of New York, asking District Judge Analisa Torres to make a ruling based on the arguments filed in accompanying documents.

In December 2020, the SEC sued Ripple Labs, alleging that the crypto firm had raised over $1.3 billion by selling XRP in unregistered securities transactions. But Ripple maintained that XRP sales and trading did not meet the Howey Test, a test created by the Supreme Court to determine whether a transaction qualifies as a security.

On Friday, September 16, the parties filed various discovery motions over the last two years without settling whether Ripple violated securities law by selling XRP.

The motions for summary judgment imply that the parties are asking the court to decide whether the SEC or Ripple has provided enough evidence to prove whether there was a violation.

Based on the summary judgment for each side, the SEC wants the federal judge to rule that the crypto company affiliated with the XRP cryptocurrency violated federal securities laws. On the other hand, Ripple wants the judge to dismiss the lawsuit without requiring a lengthy trial.

The SEC argued, among other things, that various statements by Ripple’s executives show that Ripple sold XRP, and XRP investors bought the cryptocurrency with hopes that their holdings would spike in value over time.

But Ripple claimed that there was no contract between the company and XRP investors and that there was no common enterprise, one of the requirements under the Howey test.

What Are Crypto Users Saying?

The filing of these Motions for Summary Judgement has stirred up many online chats in the crypto-community. With this, the community believes the lawsuit is approaching an end.

Meanwhile, crypto legal expert Jeremy Hogan commented about the SEC-Ripple case. He pointed out the SEC is facing several major problems, which indicated a victory for Ripple.

The analyst claimed that the SEC failed to get “on record” that any XRP purchaser heard Ripple’s marketing pitch. He said this factor eventually has the “burden to prove EVERYTHING here.” Lawyer Hogan further disclosed that one of the SEC’s experts admitted that most of XRP’s price changes are due to market forces “and not Ripple.”

NBG Georgia Shortlists Ripple Among Tech Firms for CBDC Pilot

The National Bank of Georgia (NBG) is propelling forward with its Central Bank Digital Currency (CBDC) venture, dubbed the Digital GEL Pilot Project. The bank is now in the phase of scouting for a singular technology ally to facilitate the Limited Access Live Pilot Environment. This environment aims to scrutinize the technological prowess and possible applicative spheres of the CBDC system through an array of use cases.

Post an extensive research tenure and meticulous deliberation, NBG has culled a list of nine enterprises deemed fit for this exploratory journey. These firms have showcased ample technological potential, maturity, capacity, pertinent experience, and enthusiasm for on-field examination. The notable list comprises Augentic GmbH, Bitt Inc., Broxus Holdings Ltd., Currency Network Ltd., DCM Corp Limited, eCurrency Mint Inc., FARI Solutions Ltd., Ripple Labs, Inc., and Sovereign Wallet Co., Ltd. At the current juncture, NBG maintains a technology-neutral stance, weighing the varied technological solutions these shortlisted companies can contribute to the Digital GEL project.

A Central Bank Digital Currency (CBDC) is essentially a digital form of a country’s existing currency, which is issued by the country’s central bank. Unlike decentralized cryptocurrencies like Bitcoin, a CBDC is centralized and enjoys the same legal status as physical banknotes and coins. It’s an endeavor to modernize the financial infrastructure and respond to the digital economy’s exigencies.

Among the shortlisted entities, Ripple Labs, Inc. holds a unique position with its Ripple CBDC solution. This solution aims to provide a neutral bridge between different currencies, allowing for frictionless value transfer, which can be particularly beneficial in the realm of cross-border transactions. The Ripple CBDC platform could potentially offer a robust foundation for the Digital GEL project, aligning with the objectives of fostering a seamless and inclusive financial ecosystem.

Upon concluding the selection phase, NBG aspires to earmark a single technology partner to transition into the pilot phase. This phase will test the CBDC platform in a restricted-duration live setting, evaluating the pragmatic use cases therein. The anticipation surrounding this pivotal pilot project is palpable, signifying a significant stride towards modernizing Georgia’s monetary landscape and embracing the digital currency epoch.

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