Since the United States Securities and Exchange Commission filed a lawsuit against Ripple alleging illegal securities offerings, the question of who and when hangs over many players in the crypto community. After all, for an industry that has strived to leave behind the dark history of the Silk Road, the need to desert or distance itself from anything that could be considered illegal is paramount.
While Bitstamp, OSL, and Beaxy were among the first to take a call and suspend XRP trading services on their platforms, they were never going to be the last. While it may be the case, the idea of US-based Coinbase taking a step in that direction is what keeps many members of the crypto-community awake. According to what can best be described as “inside information” given by Adam Cochran, partner at Cinneamhain Ventures, the popular exchange is in a “waiting pattern,” on the topic of XRP suspension / delisting.
“The appeal was expected as of today (December 26), but sources suggest the team has been put on hold as questions remain open even after SEC calls and interactions with attorneys,” said Cochran said, adding that there is some pressure from “investors who see this as a regulatory risk and a risk for the IPO”.
This is not unexpected, however, especially since Coinbase has now filed a registration proposal for an initial public offering. An IPO, in its most basic form, is a sign that the entity is going public and going mainstream. With Messari affirming that Coinbase could be valued at around $ 28 billion, the platform’s efforts to play it carefully are understandable.
In fact, Coinbase is one of those exchanges that has always prided itself on adopting the regulations, rather than avoiding them. This is the reason why some are actually surprised that Coinbase has yet to suspend or remove XRP.
If the exchange continues with such a course of action, one can expect a series of repercussions. Not only will the value of XRP fall, but a significant part of Coinbase’s business could be affected as well. When the lawsuit was first filed, XRP accounted for over 8% of Coinbase’s volumes. It really is a big piece. And while it can be argued that Bitstamp was more proactive in halting XRP trading, although the cryptocurrency accounts for 18% of its volumes, the truth is that Coinbase is the institutional investor’s favorite.
To give you an idea of who stands to lose business if XRP is taken off the list of major exchanges, XRP is:
+ 18% of Bitstamp volumes
+ 8% of Coinbase volumes
+ 5.5% of Kraken volumes
+ Only 4% of Binance volumes
These are just the main western sites, of course.
– Ryan Bitcorn Selkis (@twobitidiot) December 23 2020
With Cochran suggesting that the platform could simply wait until the holiday season to ‘check with a lawyer’, it may take some time before we know what Coinbase will do.