Social trading network, eToro is the latest to join the ranks of cryptocurrency platforms suspending XRP trading. The decision, understandably, was made in the light of the SEC filing against Ripple, which alleges that XRP is a security.
eToro will halt XRP purchases and conversions into its wallets only for US customers, which will be effective on January 3 at 12 pm Eastern Standard Time.
According to the announcement, customers in the United States would no longer be able to trade the crypto asset, and those having open trades must liquidate their positions before January 24.
However, the US-based users of the Israeli fintech firm are still able to withdraw Ripple’s token to any XRP wallet address, even those unaffiliated with eToro. Non-US customers are unaffected and can trade all cryptocurrencies as normal, as well as derivatives of such assets.
eToro further explained that all customers, including in the United States, can continue to use the company’s wallets to hold or transfer XRP balances.
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eToro Avoids Regulatory Headache Ahead of IPO
While the SEC’s lawsuit is a long way from being ruled upon, eToro was careful about not associating with illegal assets while the company is gearing up for an eye-catching $5 billion IPO.
Although Ripple said it will contest the charges, the legal battle with the SEC could take years if the company fights the charge in court. As such, 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.
eToro’s cryptocurrency offering allows US investors access to crypto markets through direct investing in underlying coins, as well copying the trades of other traders, and thirdly by investing in a diversified portfolio of major crypto assets though its product, Crypto Copyfund.
eToro has already secured a soft launch for its crypto services in the US in 2019, but despite its vast experience in the trading space, it was aware of the regulatory headwinds that come with expanding into mainstream assets classes.
In eToro’s existing markets, the company’s 17 million-plus users are able to trade and hold more than 1,500 different asset classes and markets, including stocks, bonds, cryptocurrencies, forex, commodities and more.