A lawsuit filed against blockchain money transfer platform Ripple by the U.S. Securities and Exchange Commission (SEC) has prompted Coinbase to suspend all XRP trading.
Paul Grewal, chief legal officer of the cryptocurrency trading platform Coinbase, said in a press release that trade limits went into effect on Monday (Dec. 28), and trading will be fully halted Jan. 19.
“The trading suspension will not affect customers’ access to XRP wallets, which will remain available for deposit and withdraw functionality after the trading suspension,” Grewal said.
He added that users will remain eligible for the Spark airdrop — the native token of the Flare Network on a separate blockchain — and “we will continue to support XRP on Coinbase Custody and Coinbase Wallet.”
As “the most trusted platform for trading cryptocurrency,” Coinbase enables people to tap an extensive array of assets that were previously “evaluated against our Digital Asset Framework,” he said.
Factors like security and compliance are considered as well as the platform’s goal of developing an “open financial system for the world. We take seriously any decision to change our customers’ access to one of those assets,” Grewal said.
The SEC complaint filed against Ripple accuses two executives with significant security holdings of raising more than $1.3 billion “through an unregistered, ongoing digital asset securities offering.”
The complaint maintains that XRP should be treated as a security and names Christian Larsen, the firm’s co-founder, executive chairman and former chief executive officer (CEO), as well as Bradley Garlinghouse, the company’s current CEO.
Ripple has countered that XRP is a currency, and therefore is not under the SEC’s jurisdiction, the Verge reported.
Earlier this month Coinbase filed for an initial public offering (IPO) with the SEC, making it the first major cryptocurrency exchange to go public.
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