US residents see their options shrink even further as Kraken freezes trading of the beleaguered crypto.
Kraken sets parameters
The exchange specified that US residents would still be able to deposit, hold, and withdraw XRP after the freeze takes place. The action affects only US residents. “Clients residing in other countries are not affected.”
The announcement also includes a FAQ list. It covers topics such as how long the ban will last (they will adapt to any change in the SEC saga). The upcoming change to a deposit-hold-withdraw only regime may change as the situation warrants. Also, the company’s plans regarding the Spark token airdop remain unchanged.
The SEC filing
The SEC action mentioned in the announcement is the set of Dec. 23 charges laid against Ripple Labs and some of its executives. The SEC claims that the company sold $1.2 billion of unregistered securities in the form of XRP through its platform. Former CEO Christian Larsen and current CEO Brad Garlinghouse are also charged with selling another $600 million in unregistered securities in the form of XRP.
Ripple Labs is defending itself in court and in the media. Garlinghouse in particular has taken to Twitter to explain the company’s position.
Garlinghouse points out that the Ripple platform has been out for over seven years. Furthermore, it already has government decisions in several countries, including the US, stating that XRP is a form of currency and not a security. He also drew attention to the timing of the charges, and claimed that the outgoing SEC administration essentially left a mess for the incoming Biden team to clean up.
Ripple in still waters
The market reaction to the SEC charges came swiftly. XRP sank highs associated with the Flare airdrop at the end of November. It hit a bottom of under $0.20 at the end of December, while retail investors were raising bitcoin to new highs. A January rally raised XRP into the high 20s.
Exchanges with significant US exposure also moved quickly. Garlinghouse noted that the US accounts for about 5% of XRP holders, but the exchanges kept an eye on compliance. Coingate, Coinbase, and Bitstamp are among the exchanges that have already signaled stoppages.
In one sign as to how Ripple will leave this eddy of activity, SEC Commissioner Hester Peirce, commonly known as ‘Crypto Mom’, stated in a recent interview that charges such as these often get settled out of court.