Over the last three days, the XRP price dropped 41 percent on Binance when news of the United States Securities and Exchange Commission’s complaint against Ripple became apparent. As a result, XRP trade has already been suspended by many minor exchanges. So far, three minor exchanges have either temporarily suspended trading or eliminated XRP, namely OSL, Beaxy and CrossTower.
Exchanges mentioned by XRP are at risk if the token is considered a security, according to prominent lawyers in the cryptocurrency industry.
Hailey Lennon, Anderson Kill’s partner, said: “You know who is at risk if XRP is considered a security? EVERY EXCHANGE THAT LISTS XRP.”
The SEC claims that Ripple has paid money to encourage exchanges to “buy and sell XRP” on their websites.
The official lawsuit brought by the SEC said that Ripple entered into arrangements with at least 10 digital asset trading platforms.
If XRP is officially considered a security, Lennon noted that the greatest risk is likely to be found in the 10 exchanges listed by the lawsuit.
The CEO of Ripple, Brad Garlinghouse, said he would “aggressively fight” with co-founder Chris Larsen to “prove our case.” Garlinghouse stressed that he had the possibility of settling with the SEC individually, but chose not to follow that path. Therefore, in the U.S., the final court ruling is expected to formally conclude whether XRP is a defense or not.
From a technical point of view, traders claim that XRP is in a situation of “do or die,” where it will have to rebound strongly at around $0.35 or face more downside at the current stage. The odds of a bigger decline to the rate of early 2020 are rising below $0.35. However, a relief rally can also not be counted out.
Alex Saunders, a cryptocurrency trader, said XRP remains risky for traders until the regulatory conflict with the SEC is resolved. He wrote: “With a plethora of coins offering enormous upside. It’s ludicrous to emotionally attach yourself to $XRP now they are being sued by the SEC. Exchanges will be delisting & financial services industry won’t dare touch it until resolved. Good investors admit things changed & move on.” The confusion around XRP was also expressed by an increase in the operation on social media around the cryptocurrency. At the same time, according to data from TheTie, the perception around XRP has fallen to its second-lowest reported level in history.