Galaxy Digital and Bitwise, as well as OSL trading platform suspended trading and selling XRP due to the SEC lawsuit against Ripple Labs. The San Francisco-based company is accused of selling $1.3 billion in unregistered securities.
Billionaire and bitcoin enthusiast Mike Novogratz’s Galaxy Digital fund announced it stopped XRP trading pending a dispute between Ripple Labs behind the development and issuance of XRP and the US Securities and Exchange Commission (SEC). “We are not trading but will continue to evaluate as facts become available,” a Galaxy spokesperson told The Block.
Jump Trading, one of the most active firms providing liquidity to exchanges and working with cryptocurrencies, also suspended operations with XRP. Jump Trading has told counterparties that it will no longer provide liquidity for XRP, according to three sources in the trading industry. Jump Trading spokesperson declined to comment. Without proper liquidity provision in the XRP markets, spreads can widen and it will become more difficult for investors to enter and exit large positions.
Asset management company Bitwise announced that it is liquidating a 3.8% XRP position in its Bitwise 10 Crypto Index Fund and removed XRP from the index.
Several crypto exchanges also suspended XRP trading. OSL, CrossTower and Beaxy trading platforms are among the first to stop trading XRP. The Simplex trading service even started blocking transactions in XRP.
The US regulator sued Ripple Labs in the case of raising more than $1.3 billion through an unregistered sale of securities in the form of digital assets. According to the lawsuit, Ripple co-founder Chris Larsen and CEO Brad Garlinghouse organized fundraising through the sale of XRP cryptocurrency, which is a security in fact, but did not properly register it under US legislation. The sale of unregistered securities has continued since 2013, the SEC notes. In addition, the SEC accuses Larsen and Garlinghouse of an unregistered sale of XRP for their own enrichment for a total of about $600 million.