Bitstamp, one of the largest crypto platforms in Europe, has become the first major cryptocurrency to suspend XRP transactions until further notice. Specifically, the popular platform will halt all trading and deposits of XRP for US customers, effective 8 January 2021.
Bitstamp announced the news on Friday, saying that it has taken the decision in light of the US Securities & Exchange Commission’s enforcement action against Ripple and two of its executives.
Still, US customers will be able to withdraw their XRP from Bitstamp at any time, and customers from other countries will not be affected.
Additionally, the move is noteworthy as 40 million XRP, valued at roughly $30 million at the transaction’s date, was moved last month from an unknown wallet address to Bitstamp.
Despite the news, XRP is up 9% for the day, with trading close to $0.29 at the time of writing. However, the altcoin has lost over $10 billion in market value as many exchanges have pulled or halted transactions after the SEC filed a $1.3 billion lawsuit against Ripple.
According to CoinMarketCap, XRP has retained its position as the 3rd largest crypto by its market capitalization, behind Bitcoin and Ethereum, after sliding down earlier to fourth place.
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Top Exchanges and Other Companies in a Wait-and-See
Before Bitstamp’s action, the move to delist XRP was limited to small trading platforms, yet major exchanges have no other choice but to follow suit. Otherwise, those who keep the token listed on their platforms may be at risk of being sued and fined if the SEC wins its case and the court deems XRP unregistered securities.
As Finance Magnets reported, the SEC’s lawsuit was filed against CEO, Brad Garlinghouse and Co-founder, Chris Larsen, alleging that they raised $1.3 billion via ongoing, unregistered securities offerings since 2013.
Although Ripple is regularly grouped with other cryptocurrencies, its purpose is different as it operates a decentralized payment settlement solution for banks and financial institutions that is fast and scalable.
Ripple is developing several blockchain-based solutions that enable cross-border money transactions between banks in a faster and cheaper way than the current systems allow.
Some of the top 10 US banks, as well as other big remittance companies, are already using Ripple’s product across their payment services, including MoneyGram, Standard Chartered Bank, American Express and many others.