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After SEC’s Lawsuit, XRP’s Market Cap Fell 63%, and is still falling!

XRP’s market fell by $16B, or 63% since the news of the US SEC’s lawsuit against Ripple Labs came on December 21.

The SEC alleged that Ripple Labs raised $1.3B in unregistered securities since 2013 through selling XRP to investors, including those who came from the US.

The lawsuit has made the price of the coin collapse after crypto exchanges suspended trading of the coin and crypto funds liquidated assets.

The Start of Misery

XRP has benefitted from Bitcoin’s bull run. Last Thursday, the coin was hovering at a price of $0.6 and a market cap of $27B. However, when Ripple spread the news of an imminent SEC lawsuit, everything turned into chaos.

Ripple CEO Brad Garlinghouse and co-founder Christian Larson said that the SEC was about to file a complaint against them that would say that they violated securities laws by selling XRP.

“It’s not just Grinch-worthy, it’s shocking,” Garlinghouse said “It’s an attack on the entire crypto industry and American innovation.”

The coin dropped to $0.5 by the time the SEC filed its lawsuit the next day. As predicted, the complaint alleged that Ripple held illegal unregistered securities sales of XRP.

The complaint has a huge impact on the crypto industry. If the SEC can convince a judge that XRP carries an investment contract in the US law, it can sue crypto companies that trade with XRP or exchanges that facilitate the sale of the coin on the same grounds.

The price of XRP dropped quickly after the SEC’s announcement, it has been made worse when many crypto companies announced that they will cut ties with XRP or stop trading of the coin.

“Effective immediately, Beaxy Exchange is halting all XRP derived trading activity. Withdrawals will remain enabled until further notice,” a press release said last December 22, 2020.

Beaxy was one of the first exchanges to delist the coin, then others followed afterward. On December 23, XRP’s price closed at $0.26 after Galaxy Digital, Jump Trading, Bitwise, Cross Tower, and OSL made similar announcements.

Fortunately, the price of XRP recovered to $0.31, but the news that Bitstamp will halt trades and deposits of XRP for the US customers in January descended the price of XRP once again, this time to $0.29.

“In light of the recent SEC filing against Ripple Labs Inc., which alleges that XRP is a security, we are going to halt all trading and deposits of XRP for our U.S. customers on January 8 2021 at 9 PM UTC,” Bitstamp said in a press release.

London-based B2C2 was the next exchange to prevent US investors from trading XRP. The price of XRP fell to $0.28 after news broke of B2C2’s decision on December 27.

B2C2 was the next exchange that prevented US investors from trading XRP. The price fell to $0.28 after news broke of B2C2’s decision last December 27.

Ripple’s Hot Water

A huge blow was experienced last December 28, when two US crypto exchanges, OKCoin and Coinbase announced that they will suspend the trading of XRP.

OKCoin said in a statement, “As the lawsuit proceedings take place, we have determined it is the best course of action to suspend XRP trading and deposits on OKCoin effective January 4, 2021.”

After OKCoin announced its suspending XRP trading, Coinbase also announced that it would suspend trading of XRP for its US Customers effective on January 19.

Paul Grewal, Chief Legal Officer, said in the Coinbase blog, “In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform.”

As of now, XRP has a total market capitalization of $9B and trades at $0.19.

How long can this misery by XRP go? Who will be the next exchange to announce its stepping out of XRP? How low will the price of the coin collapse?

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