Kanalcoin.com – The XRP token is experiencing the third biggest crash of all time after its parent company, Ripple, was sued by the United States Securities and Exchange Commission (SEC). Ripple is alleged to have illegally traded and exchanged securities tokens.
On December 22, 2020, the United States Securities and Exchange Commission (SEC) sued the XRP token producing company, Ripple. Ripple is being sued by the SEC for allegedly offering and trading digital asset securities that are not registered with the SEC.
Apart from that, the SEC also mentioned that the profits that Ripple has received so far from trading illegal tokens are being enjoyed by its superiors. The SEC also dragged the names of Ripple’s CEO, Brad Garlinghouse, and Ripple’s co-founder, Chris Lansen, in the case.
The SEC claims that the ‘illegal’ activities carried out by Ripple have been carried out since 2013. This then made investors and Ripple customers begin to withdraw one by one from trading and exchanging XRP token.
Several clients have withdrawn from working with XRP, including Moneygram and Bitwise. Bitwise is reported to have liquidated all of their XRP assets after the SEC sued Ripple. Meanwhile, Moneygram emphasized that they had nothing to do with Ripple.
Moneygram said that they have not relied on tokens and technology issued by Ripple to convince their customers. Some small clients have also decided to suspend XRP assets on their exchanges.
OSL, Beaxy, and CrossTower have announced that they will stop trading XRP tokens with their companies. Apart from that, there is also Bitstamp which plans to suspend XRP trading, specifically for the United States only.
Most recently, OKCoin decided to suspend XRP from trading and deposits on their exchange on Monday (28/12/2020) local time. This policy is cited as OKCoin’s best course of action in response to legal action taken by the SEC against Ripple.
These conditions made XRP’s market capitalization value drop dramatically to $ 130 billion. In fact, in 2018 the XRP capitalization value reached $ 140 billion which is the highest XRP capitalization value of all time.
This XRP collapse is also the third biggest of all time. XRP is only behind the collapses of Washington Mutual ($327 billion) and Lehman Brothers ($691 billion) in 2008.
This was conveyed by a representative from a crypto currency research company, TIE, Josh Frank. Apart from that, Frank also said that those who really suffered losses in the XRP collapse were individual investors who put a lot of money in XRP.
Frank also said that the founders of Ripple didn’t seem to care and only produced XRP tokens continuously to generate millions of dollars in profits.
“It is sad and unfortunate that the biggest losers in the XRP story are individual investors who have lost unimaginable amounts of money,” Frank told Cointelegraph reported by Kanalcoin.com.
“The founders of Ripple kept dumping their tokens for years and made hundreds of millions of dollars,” Frank continues.