XRP Carnage Begins as the Delisting Commences

XRP’s pain is not over, as a matter of fact, it may have just started.

It all started on Monday when Ripple CEO Brad Garlingouse said the SEC is going to sue them for selling unregistered security.

This led Bitwise Asset management to announce that they have liquidated about $9.3 million of its XRP position, representing 3.8% of its Bitwise 10 Crypto Index Fund.

“Grayscale likely to follow suit imminently,” with “most exchanges will follow as well,” said Ryan Selkis of Messari.

Two small exchanges Beaxy and CrossTower have also halted XRP trading on their platforms. The day the SEC officially charged Ripple and its former CEO Chris Larsen & current CEO Garlinghouse for conducting illegal sales, OSL also suspended payment and trading services.

OSL is one of Asia's largest over-the-counter (OTC) desk, catering to institutions and HNW individuals. Given that “they dominate institutional mindshare,” this would be “a significant and a huge blow to XRP,” noted one trader.

Interestingly, in 2020 XRP accounts for 18% of Bitstamp volumes, 8% of Coinbase volumes, 5.5% of Kraken volumes, and 4% of Binance volumes.

And now, there is speculation that San Francisco-based Coinbase is planning to do the delisting as well. Adam Cochran, a partner at Cinneamhain Ventures said,

“Sources suggesting that Coinbase has already had discussions with counsel about the delisting of XRP. It seems two potential plans are forming, one which puts the delisting on Friday. Unclear which Coinbase products it will impact but most likely Coinbase and Pro.”

It is possible that Coinbase would take this route as the exchange is planning an IPO itself and would be inclined to toe the regulatory line.

This would be a big hit to XRP and Ripple as Coinbase is the largest crypto asset exchange in the US with about 35 million users all over the world. This could see XRP losing a good chunk of its value, again.

Back in 2018, Coinbase had shared its “path to listing SEC-regulated crypto securities,” but if deemed security that won’t be good be Ripple because it would make its digital asset necessarily useless.

While some wish for the SEC to not win this case, Attorney Stephen Palley, a partner at Anderson Kill says XRP is actually a security.