XRP, a digital currency developed by Ripple Labs, has been at the center of regulatory scrutiny since the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in 2020. The SEC’s allegations that Ripple conducted unregistered securities sales led to XRP being delisted by major centralized exchanges including Coinbase, Bittrex, and Binance.US.
Legal Developments Leading to Relisting
In a landmark ruling in 2023, Judge Analisa Torres found that secondary market sales of XRP did not constitute securities transactions. This decision prompted exchanges to reconsider their stance, leading to the gradual relisting of XRP. Coinbase was among the first to reinstate XRP, signaling a potential shift in the token’s accessibility to investors and speculators across various platforms.
Recent Announcement by Coinbase
On May 23, Paul Grewal, Coinbase’s chief legal officer, announced the resumption of XRP trading in New York, marking the end of a nine-month suspension. Grewal’s statement highlighted the efforts made in collaboration with New York State authorities to ensure compliance and secure approval for relisting: “XRP trading on Coinbase is available again in NY. We heard you and put in the work in strong partnership with the State. And now the word can be put out— we are back up.”
Regulatory Environment in New York
Despite the positive developments at the federal level, XRP continued to face regulatory hurdles in specific jurisdictions, including New York. The New York Department of Financial Services (NYDFS) had previously removed Ripple Labs from its Greenlist in September 2023, which led to the suspension of XRP trading for New York residents. Entities in New York wishing to custody digital assets for customers must obtain individual approval from NYDFS, underscoring the stringent regulatory framework in the state.
The news of Coinbase’s relisting of XRP in New York positively impacted the token’s market value, driving its price from $0.51 to nearly $0.53 shortly after the announcement. However, the price of XRP has faced challenges, with a notable decline from its March 2024 high of $0.74, reflecting the volatile nature of cryptocurrency markets.
| Date | Event | Impact on XRP |
|---|---|---|
| Dec 2020 | SEC sues Ripple | Initial delisting of XRP from exchanges |
| 2023 | Judge rules secondary sales of XRP not securities | Exchanges begin relisting XRP |
| Sept 2023 | NYDFS removes Ripple from Greenlist | Suspension of XRP trading in New York |
| May 23, 2024 | Coinbase resumes XRP trading in New York | Positive market reaction; price increase |
The resumption of XRP trading on Coinbase in New York is a significant development for XRP investors and the broader cryptocurrency ecosystem. It reflects the evolving regulatory landscape and the ongoing efforts by platforms like Coinbase to navigate complex legal frameworks. As regulatory clarity improves, the cryptocurrency industry may witness increased stability and growth, benefiting investors and stakeholders involved in digital assets.
Featured image credit: Ivan Radic via Flickr