You cannot buy XRP straight from Coinbase right now after the SEC charged Ripple Labs of illegally pulling more in than $1.3 billion in earnings by issuing digital-asset investments that were not regulated with the SEC. Coinbase banned XRP transactions on 19th January 2021.
According to Ripple Labs, XRP is not a security and so should be cleared. While the Ripple Labs and SEC legal dispute continue, some cryptocurrency investors are still eager to acquire XRP.
The Ripple ledger, which allows international currency exchanges and remittances, uses XRP as its coin.
XRP can be used as a gateway currency in transactions comprising various currencies on the Ripple network, like us dollars, Euros, Japanese yen, Francs, and others.
Even after the trade stoppage, cryptocurrency traders will be in a position to withdraw and use XRP in their wallets.
Coinbase also stated that it would enable the distribution of unrestricted Spark tokens, which gives XRP smart contract capability, in an amount equivalent to XRP in user wallets on 12th December 2021.
Coinbase’s Business and Legal Aspects
The backlash from the crypto community has hit Ripple’s XRP, and its price has plummeted since the SEC opened a complaint against it.
The case accuses XRP’s backers of undertaking an illegal securities issuance and benefitting financially from it.
In recent days, Coinbase has become the third market to take a stand against XRP.
Bitstamp, located in Belgium, had previously indicated that it would stop all XRP exchange and deposit activities on 8th January 2021.
OKCoin, a San Francisco-based platform, had also announced that XRP transactions and deposits would be suspended beginning 4th January 2021.
Coinbase’s case is noteworthy, though, as it is the first large exchange to ban XRP trading.
Coinbase, North America’s largest cryptocurrency exchange, recently filed to go public with the Securities and Exchange Commission.
According to some analysts, the exchange’s choice to follow the agency’s lead was motivated by a desire to avoid being on the wrong path of legality at such a pivotal moment in its history.
The Digital Asset Standard, which Coinbase uses to determine whether a token should be listed, specifies that an item should not be classed as a security under the company’s securities laws.
The legal position of a token is determined using aspects of the Howey Rule, which is utilized by the SEC to assess if a token falls on a security position or not. Those legal concerns are inextricably linked to commercial objectives.
According to certain estimations, Ripple accounts for a significant portion of Coinbase’s transaction volume. Delisting or halting XRP trading may result in a revenue loss for the exchange.
While it has never made its finances public, earlier estimates have suggested that trading operations account for a significant amount of the organization’s earnings.
If you’re thinking about investing in Ripple, you should be aware that it comes with a significant level of risk, just like any other currency.
However, due to the cheap price point, it has the potential for a big return with a low entry barrier.
There are currently no ETFs that monitor Ripple if you do not like the concept of a digital wallet or any of these processes.
Ripple might reach the same heights as Bitcoin, and you’ll be grateful to yourself in a few years you never know what might happen next.
Why doesn’t Coinbase sell Ripple?
Coinbase does not sell Ripple because, according to the SEC, XRP is security which should be regarded as such.
That implies Ripple’s current and former CEOs ought to have been answerable for releasing a range of additional information required to assess the risks associated with Ripple before anyone invested.
Ripple, on the other hand, holds the opposite viewpoint.XRP, in Ripple’s opinion, is a currency and thus does not belong to the SEC’s jurisdiction.