Kraken Halts XRP Trading for U.S. Clients
Last updated on December 5th, 2022 at 02:31 pm
Cryptocurrency exchange Kraken has announced its plans to halt its trades on XRP token, following the recent SEC lawsuit against Ripple Labs.
According to the blog post, the suspension will only affect Kraken clients living in the U.S. and will begin on January 30. Kraken clients who are not based in the U.S. will be able to trade on XRP on the platform without any issues.
With this suspension, Kraken has become the latest in a growing list of exchanges that have suspended or completely stopped trading XRP on their platform.
The cryptocurrency is in the middle of a regulatory crisis with the U.S. Securities and Exchange Commission (SEC) after a lawsuit was filed against Ripple Labs and its executives.
Kraken also stated that the halt will not affect customers’ access to withdraw, hold or deposit XRP.
Top exchanges such as OKCoin, Bitstamp and Coinbase have all suspended their trading activities on XRP following SEC’s legal action on Ripple.
XRP Price Struggles To Recover
While Ripple is at loggerheads with the SEC, the XRP price has continued to suffer the consequence. The initial fall of the token price was steep and the continued uncertaintly has helped to maintain the price below $.30 USD.
The continuing struggle in price recovery by the fourth largest cryptocurrency by marketcap is due in large part to more exchanges severing ties and delisting the token.
Based on earlier reports, the SEC filed a lawsuit against Ripple’s Co-founder Chris Larsen and the company’s chief executive officer, Brad Garlinghouse. The regulator alleged that the 1.3 Billion raise by Ripple in 2013 was a securities sale and as such made it unregistered and illegal.
Although Ripple has come out to say it will contest the lawsuit in court, the conclusion of the case could take years. As a result, this creates uncertainty for the future of XRP in the eyes of many stakeholders in the crypto industry, including exchanges, crypto fund managers, as well as institutional investors.
Kraken Treading With Caution
Kraken is the latest exchange to take a careful look at the situation and has decided to halt its trading activities on the token until further notice.
The exchange is also moving cautiously so not to be on the wrong side of a negative ruling against the crypto asset. This is especially true since the cryptocurrency exchange has received approval to roll out crypto banking services under an SPDI Charter from the SEC.
The SPDI bank charter will allow the exchange to operate as an independent bank. This will allow Kraken to reduce over dependence on third-party financial institutions and allowing the exchange to offer fiduciary, custody and deposit services for digital assets.
This SPDI Charter is undoubtedly one of the determining factors in Kraken’s decision to suspend the trading of XRP to U.S. residents. The cryptocurrency exchange, soon to be bank, certainly does not want to jeopardize its standings with the U.S. regulator.
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