The United States’ Securities and Exchange Commission’s legal action against Ripple and its CEO, Brad Garlinghouse, and co-founder Chris Larsen have spelled trouble for XRP. Amid falling prices and speculation in the market, prominent digital asset exchange OSL suspended all XRP payments and trading services.
The tweet from OSL read:
“Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice.”
The Fidelity backed exchange has many institutions and high net worth individual as its clients.
The SEC has alleged that the XRP token is classified as a security and has accused Ripple and its two executives of raising over $1.3 billion through an “unregistered, ongoing digital asset securities offering” to investors since 2013. It adds that ripple used XRP for labor and market-making services, while Garlinghouse and Larsen failed to register their personal XRP sales which were estimated to be around $600 million.
According to the director of the SEC Enforcement Division, Stephanie Avakian,
“[These actions] deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”
However, Ripple has highlighted that the token cannot be categorized as a security, as a large number of banks and vendors are using the token for transactions.
The current crackdown may push Ripple out of the United States. Given the events taking place since 22 December, XRP’s value has crumbled by 42.74% from $0.5436 to $0.3112. At press time, XRP was trading at $0.3133 with a market cap of $14.38 billion and had once again slipped to the fourth position on the CoinMarketCap’s list.