The CEO of the "Kraken" platform reveals the reasons for stopping support for the digital currency XRP
The SEC's lawsuit regarding XRP on the grounds that it is an unregulated security has yet to be resolved and the Ripple currency has remained in an unclear legal status since last December.
After the lawsuit, many cryptocurrency trading platforms have moved to stop trading XRP digital currency in the United States, or to delete the cryptocurrency from their platforms entirely.
In a tweet, Mr. Jesse Powell, co-founder and CEO of the Kraken cryptocurrency exchange, justified the decision to write off XRP at the start of the lawsuit.
Where he explained the matter by saying:
XRP digital currency carries huge risks for trading platforms.It must be assumed that the SEC's suit was raised in good faith.But judges tend to side with the agencies.If XRP is found to be a safety, the SEC will say that trading platforms should be aware of this.
Many cryptocurrency trading platforms such as Coinbase, Kraken and US Binance have moved to suspend XRP trading on their platforms.
The decision is largely due to companies attempting to curb or avoid sanctions against XRP, if it is designated as a US security.
Although investment options in XRP are limited in the US, it is still possible to trade cryptocurrencies outside the US.
The SEC failed to clarify in advance about XRP.
The US XRP case remains unclear and conclusive yet, as the SEC case against Ripple is still ongoing.
The Securities and Exchange Commission is suing and accusing Ripple of selling $ 1.3 billion in unregistered securities.
During the pre-trial hearing between the SEC and Ripple, lawyers for Ripple highlighted an incident in 2019 in which a trading platform approached the SEC demanding clarity about the XRP digital currency.
This trading platform approached the SEC to take its opinion on XRP, as it wanted to make sure that the XRP digital currency was not safe before listing it for trading on its platform.
However, since the Securities and Exchange Commission did not provide a clear response, the trading platform did its own research and concluded that XRP is not safe.
The fact that the Securities and Exchange Commission had moved to sue Ripple in December coincided with the departure of former Commission Chairman Jay Clayton, a matter that was severely criticized by Ripple executives.
The case is still going on.
We will see what the court will see in the coming months, whether XRP is a cryptocurrency or a security token, a decision that will also determine the next direction for trading platforms that will state their position on re-trading XRP or not.
Huge asymmetrical risk for exchanges. Have to assume SEC's case is in good faith. Judges tend to side with agencies. If XRP found to be a security, SEC would say that exchanges should have known. Safe harbor pending outcome would have been responsible if only purpose is to "test" https://t.co/KnA71Bebg0
— Jesse Powell (@jespow) March 6, 2021