Ripple (XRP) have seen their price plummet further after the SEC announced that they were pursuing a complaint against the owners of the cryptocurrency after finding issues in the way that they sell their coin.
The news resulted in the coin seeing almost 75 per cent of their coin price fall after largescale dumps were pushed by holders in a bid to break ties within the coin before the complaint came into force and news that Coinbase were the latest to announce they would be stopping trading from their platform pushed holders to look to cash out of their holdings.
Prior to the SEC complaint coming to light, XRP had recording their highest price to date back in November 2020 after a weak USD market resulted in investors looking towards the crypto market instead.
As of Tuesday, Ripple (XRP) had seen a further 31% decline in price at the close of the day, resulting in a session low of $0.2011 but climbing just ever so slightly at the close to $0.2018 a coin.
What is the SEC complaint against Ripple Coin about?
The US based Securities and Exchange Commission revealed that they believe that there is an issue with the way that Ripple had been selling their cryptocurrency and have deemed their sales to have been equal to effectively running a $1.3 billion unregistered sale of XRP, a coin that they identify to be a security rather than cryptocurrency.
Why does Coinbase stopping trading affect XRP pricing?
Coinbase are one of the largest trading platforms when it comes to the cryptocurrency market and with so many users, they have the ability to be able to make a coin more accessible to a wider variety of potential holders and investors, which can see crypto coins gain popularity, often referred to as the Coinbase effect.
In a reverse of accessibility, the decision to stop supporting XRP trading means that holders will be looking to dump their investments in a bid to maintain control over their funds, which will be reduced as the platform prevents them from being able to buy or sell XRP for the foreseeable future.
Coinbase issued a comment, saying “Trading will move into limit only starting December 28, 2020 at 2:30 PM PST, and will be fully suspended on Tuesday, January 19, 2021 at 10 a.m. Pacific Standard Time”.