Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
According to the announcement, the XRP deposit and trading would be disabled on January 4, 2021, as the lawsuit proceedings are taking place.
OKCoin has announced its intention to suspend XRP trading and deposit following the recent lawsuit against Ripple Lab, the company behind the asset, and two executives. This is a huge blow as panic withdrawal has been triggered with investors under pressure to switch to other assets. Coinbase has also announced that they will halt XRP trading in the coming year amid the reported lawsuit. The price of XRP has been affected heavily having dropped from its yearly high to as low as $0.22 especially in a period that is supposed to be a celebration for a bull run.
OKCoin Announcement Related to XRP
According to the announcement, the XRP deposit and trading would be disabled on January 4, 2021, as the legal proceedings take place. OKCoin also pointed out two different timelines for the suspension. The first one has to do with users who have borrowed from the XRP/USD margin pair. Those who fall under this category have until 7:00 PM PST January 13, 2021, to return the borrowed value. Users who refuse to abide by this will have to face an automatic liquidation by their system to end the loan contracts as reported by the exchange.
The second suspension timeline has to do with the spot trading, margin trading, and deposit. Customers who fall within this category should be aware that the above-mentioned activities would be suspended starting from 7:00 PM PST on January 14, 2021. OKCoin noted that the ongoing legal battle will take time to resolve, and there is no known date for the legal proceeding to end. For this reason, they will inform their customers when they get access to any information that can influence the change of their position.
The Legal Battle
The US Securities and Exchange Commission has sued Ripple for the illegal sale of securities. This was revealed by the Ripple CEO Brad Garlinghouse in a recent interview. SEC, unlike Ethereum and Bitcoin has refused to recognize XRP as a currency. XRP was premined, and a lion-share of its units are within the possession of Ripple in an escrow, and periodically released into the market.
Garlinghouse argues that they do not tap the reserve funds anyhow as they please. According to him, XRP has become increasingly decentralized in recent times as it has been recognized as a bridge currency for cross-border transactions. In another part, he accused the Trump administration of being hostile to the cryptocurrency market.
He, therefore, believes that the incoming administration may certainly create a favorable environment for cryptocurrency. Also, he assured that they will not allow themselves to be bullied by the SEC, but instead, they will fight for the entire cryptocurrency ecosystem.
Garlinghouse believes that treating XRP as security controlled by Ripple is equal to treating oil as security controlled by Exxon Mobil Corporation (NYSE: XOM).