SEC’s Lawsuit Triggers Dissolution Actions From Grayscale
Most crypto traders are unaware that XRP’s developer has a virtual court hearing scheduled for February 22, 2021, to face accusations brought forth by the Securities and Exchange Commission. The lawsuit claims Ripple’s Executive Chairman and CEO exchanged XRP tokens as securities totaling more than one billion dollars. Soon after information about the SEC’s lawsuit spread amongst the crypto market, popular crypto exchanges released announcements regarding delisting XRP token trades. Coinbase and Binance ranked as the first exchange platforms to halt further XRP trades.
Following the renowned crypto platforms’ delisting announcements, XRP tokens crashed approximately twenty-five percent. Ripple Labs has expressed XRP’s longevity in the crypto trade market, no matter what the outcome of the pending SEC lawsuit. On January 15, 2021, Kraken announced XRP token trades would cease starting January 30, but these regulation changes exclusively affect U.S. traders.
Altcoins Thriving in Bitcoin and XRP's Downfall
XRP and Bitcoin’s fall from grace on crypto exchange markets paved the way for altcoins to take the light. As XRP declined, Polkadot blockchain’s crypto token surpassed XRP to become the industry’s fourth-largest digital currency. With a DeFi crypto token altering the waves of crypto exchanges, novice traders seemingly abandoned Bitcoin and XRP. Experienced crypto traders aren’t gambling as carelessly as their newbie counterparts because DeFi tokens traditionally thrive only when other crypto leaders experience bearish market trends.
Chainlink’s crypto token surpassed record-breaking values following XRP’s delisting on crypto exchange markets. LINK’s value nearly tripled during the few first weeks of 2021, with several DeFi tokens nipping at its heels. Ether and alternative coins showed market trends following Polkadot’s DOT token after Litecoin and Ethereum’s Ether gained more than ten percent in twenty-four hours.
Grayscale Reacts to SEC's Impending Lawsuit Against XRP
On January 13, Grayscale announced its upcoming plans to dissolve XRP Trust. A few days before Grayscale addressed the XRP Trust’s dissolution; the leading digital asset firm liquidated XRP from Digital Large Cap Fund. Grayscale attributed XRP liquidation and XRP Trust’s dissolution to the Securities and Exchange Commissions’ accusations against Ripple. If Ripple wins the upcoming legal case and dodges outside regulations, XRP will unlikely bounce back to reclaim its position amongst crypto industry leaders.
DOT tokens legged remarkable gains after Grayscale dropped the bomb regarding dissolving XRP Trust assets. DOT operates on Polkadot’s decentralized blockchain, but radical changes could occur to DOT’s value if Ripple alters XRP’s negative spiral. XRP trades are performing below the $0.030 level and need to trigger bullish activity to reverse their current crashing value. For XRP to effectively stimulate bull market trends, XRP would repeatedly require daily closing candles of at least $0.38.
Is This the End of XRP?
XRP isn’t the only cryptocurrency to face scrutiny from the Securities and Exchange Commission, but previous lawsuits ended in settlements. The SEC defines digital currencies as securities, but cryptocurrencies aren’t considered legal tender. Until digital currencies’ base value converts to fiat currencies’ traditions, other cryptocurrencies could face similar legal troubles.
Celsius is a cryptocurrency leader whose CEO has expressed minimal fears about facing lawsuits similar to Ripple’s XRP. Celsius leaders don’t believe CEL tokens will fall subject to the same legalities because Celsius filed a Form D with the SEC for exemption from registering securities sales. It isn’t clear whether Celsius crypto tokens will avoid future action on behalf of the SEC because the crypto exchange market created several legal gray areas.