OKCoin has become the latest cryptocurrency exchange to suspend trading on the XRP token in light of the US Securities & Exchange Commission’s enforcement action against Ripple and two of its executives.
XRP price has crashed another four percent today as more exchanges and partners are distancing themselves from the fourth-largest cryptoasset by market capitalization. The most recent example was earlier today when cryptocurrency market maker, B2C2 paused XRP trading with its US counterpart platforms.
Leading European platform, Bitstamp was the first major exchange to suspend XRP transactions effective 8 January 2021. However, this is only limited to deposits and trading made by US customers as global Bitstamp customers are not affected and can trade as normal.
In an update on Monday, OKCoin said it is halting XRP support effective January 4, where spot trading, margin trading and deposits will be suspended till further notice.
Lawsuit Leads More Exchanges to Suspend XRP
The new restrictions apply to all clients and users who borrowed margin to juice up their bets on the XRP/USD pair, either in fiat or crypto. They are required to return the borrowed funds before January 3. Delays will trigger a liquidation by OKCoin systems to close the loan contracts, the exchange said.
“As the lawsuit proceedings take place, we have determined it is the best course of action to suspend XRP trading and deposits on OKCoin. It is likely that this situation will take time to reach a resolution. We will proactively inform our customers when we have information that may change our position,” OKCoin statement further reads.
Before Bitstamp’s action on Friday, 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 Ripple CEO, Brad Garlinghouse and Co-founder, Chris Larsen, alleging that they raised $1.3 billion via ongoing, unregistered securities offerings since 2013.