Things continue to go downhill for Ripple and its XRP token amid its legal battle with the SEC over the designation of the token as a security. Since the lawsuit was made public, the price of XRP has plummeted and many exchanges have chosen to distance themselves — now including Blockchain.com
Blockchain.com follows in the footsteps of Coinbase, Binance.US, OKCoin and others. The popular wallet provider and crypto trading platform stated:
“Blockchain.com will halt XRP trading beginning Thursday, January 14th at 11:59 pm GMT. For all customers who have XRP balances, you will continue to have access to your XRP to send after we halt trading, but we will no longer support receiving more XRP in the Exchange.”
Ripple under fire
The fall from grace for Ripple and its token came amid the growing unrest from the SEC around the designation of XRP. The agency has given the green light to Bitcoin and Ethereum multiple times to operate outside of its securities jurisdiction, but has always been sceptical of XRP.
Director Bill Hinman of the SEC’s Division of Corporation Finance explained in 2018 that XRP is not like BTC or ETH.
“If the network on which the token or coin is to function is sufficiently decentralized — where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts — the assets may not represent an investment contract,” he explained in counter to how Ripple operates.
Ripple co-founder dumps XRP
One of the Ripple co-founders, Jed McCaleb, sold $400 million worth of XRP in 2020, having left the firm in 2014.
While clearly not associated with Ripple since then, McCaleb did sign an agreement with Ripple Labs that limited the amount of XRP he can sell per week in order to avoid negative pressure on the market.
He received widespread criticism but repeatedly sought to assure investors that his selling had not impacted the price of XRP. McCaleb’s agreement with Ripple Labs comes to an end in 2023.
There have been warnings over the potential risks associated with a single entity wielding such a significant economic influence over a project with which they are no longer involved:
“Whether or not you believe the future is bright for blockchains like Ripple, the economic power and consequences of whales like Jed McCaleb cannot be ignored…” explained the popular Twitter page, Whale Alert.