Binance’s delisting of XRP tokens adds to the uncertainty surrounding Ripple’s legal battle with the SEC, leaving the future of both the cryptocurrency and the ongoing lawsuit in question.
In a shocking move, Binance, the world’s largest cryptocurrency exchange, has announced its decision to delist XRP leveraged tokens from its platform. This development comes at a critical juncture when both Binance and Ripple, the creator of XRP, find themselves entangled in a legal battle with the United States Securities and Exchange Commission (SEC).
The delisting decision is expected to have far-reaching consequences, raising questions about Binance’s outlook on Ripple’s chances of prevailing in its ongoing lawsuit against the SEC. Speculations suggest two plausible explanations behind Binance’s move: either the exchange has lost faith in Ripple’s defense or it is attempting to appease the SEC by removing tokens that lack the regulatory body’s approval.
The implications of this decision are particularly severe for Ripple, which has been engaged in a relentless legal war with the SEC for over two years. The SEC alleges that Ripple engaged in the trading of unregistered securities, specifically targeting Ripple. Binance’s announcement adds to the mounting challenges faced by Ripple, potentially weakening the exchange’s position in the eyes of market participants.
Binance’s Delisting Of XRP Tokens: Implications For Traders and The Future Of XRP
According to Binance’s announcement, users are advised to redeem their leveraged XRP tokens before the delisting takes effect on July 25th at 6 am UTC. The affected tokens include XRPUP and XRPDOWN, which allow traders to take long or short positions on XRP’s performance as an investment. Additionally, Binance has further declared that any remaining Ripple tokens in customers’ accounts after the specified deadline will be sold and exchanged for Tether’s USDT stablecoin.
The choice of USDT as the preferred stablecoin for the exchange raises eyebrows since stablecoins, including USDT, have not gained regulatory clarity from the SEC. Chair Gary Gensler has indicated that cryptocurrencies other than Bitcoin, Ethereum, Litecoin, and Bitcoin Cash may not receive the coveted “not securities” classification.
However, during a recent Capitol hearing, Federal Reserve Chair Jerome Powell expressed his support for stablecoins as a viable form of payment, diverging from Gensler’s perspective. Powell emphasized the importance of stablecoins pegged to fiat currencies, such as the US dollar.
The decision by Binance to convert the remaining XRP tokens to USDT rather than Bitcoin or Ethereum suggests that there might be more at play than merely attempting to appease the SEC. It is plausible that Binance lacks confidence in the future prospects of XRP, thus opting for USDT as an alternative.
Ripple VS. SEC: An Uphill Battle To Prove XRP’s Non-Security Status
Ripple’s legal battle with the SEC has been long and arduous, characterized by occasional glimmers of hope that ultimately failed to materialize into substantial victories. The SEC’s lawsuit alleges that Ripple profited from trading XRP, considering the token to be a security that the exchange failed to register adequately. Ripple vehemently denies these allegations, striving to disprove the SEC’s claims.
In an attempt to bolster its case, Ripple invoked the Hinman documents, a series of communications associated with a speech given by former SEC director William Hinman. These documents highlight the possibility of crypto tokens transitioning from securities to commodities as they achieve a certain level of decentralization.
Despite the SEC’s efforts to keep the documents under seal, Ripple successfully persuaded the federal government to release them. This development generated a surge of optimism among experts, who predicted a favorable outcome for Ripple.
Ripple’s CEO, Brad Garlinghouse, even took to social media, accusing the SEC of acting in bad faith and intentionally causing confusion regarding regulatory rules. However, recent updates on Ripple’s legal battle have been scarce, leaving the industry uncertain about the progress of the case.
With Binance now distancing itself from XRP, concerns regarding the future of both the token and Ripple as an exchange intensify. The delisting decision adds to the growing skepticism surrounding XRP’s fate, leaving the cryptocurrency community eagerly awaiting further updates on Ripple’s ongoing legal ordeal.