OSL, a Fidelity backed leading digital asset platforms in Asia has suspended all XRP payments and trading services immediately after SEC formally filed a lawsuit against Ripple and two of its executives for the sale of $1.3 billion worth of unregistered security. Ripple, the parent company responsible for managing XRPs supply had yesterday revealed that they might face a lawsuit from SEC in the coming days.
Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice.https://t.co/EXJJEHMawn
— OSL (@osldotcom) December 23, 2020
Ripple and its two executives Chris Larsen and Brad Garlinghouse are being sued for $1.3 billion for the sale of an unregistered security. Out of the $1.3 billion in the total sale, almost $600 million came back to the two executives in question, as per the SEC document.
Ripple in its defense stated that “in the public interest” the token cannot be deemed as security, since hundreds of banks and vendors are using the token for transactions. The cryptocurrency company also managed to enrage many Bitcoin and Ethereum fans by calling it “Chinese-controlled,” leading to a heavy backlash from the community.
The lawsuit against Ripple affected the price of the XRP token the most as the former third-largest currency has dumped most of the gains it made towards the end of November and also lost its spot to Tether. The token has registered a 25% dump over the past 24 hours currently trying to hold its position above $0.30. Many crypto pundits belive even if XRP manages to keep itself afloat in the market, the price of the token would take a serious toll and might recede to $0.10 levels by early January next year.
The manipulated Ripple pump from last month is nearly back to zero against BTC. What a scam. pic.twitter.com/DCg1HZo33p
— Preston Pysh (@PrestonPysh) December 22, 2020
The Future Looks Grim For Ripple And XRP
Ripple as a fintech company was making great progress in terms of expanding the market for XRP with hundreds of banks across the world using its on-demand liquidity (ODL) services, but they never bothered to address the rasing criticism against XRP’s floated market cap. The technology company maintained throughout that the token is not Security despite them centrally managing XRP supply with periodic dumps to keep its market cap at third position.
XRP token price is among the worst-performing digital assets since 2017 high as it remained inactive for most of the three years failing to break past the $0.30 barrier forcing many to question XRP’s third position on crypto ranking by market cap. The recent closure of service by OSL might just be the tip of the ice-berg which might get followed by many other investors and partners backing out.
Ryan Selkis, the co-founder of Messari is not a big fan of Ripple as evident from his latest yearly crypto review report, which forced BitStamp to apologize to the community and pull down the report has been predicting XRP’s doom for quite some time now. He now predicts that Ripple’s top liquidity partners would back out and its ODL services which it is most known for would meet a similar fate.
I just read the Ripple complaint 3x.
XRP holders are completely f*cked. I'd expect sub $0.10 by mid-Jan.
I think the company will get away with the "securities" element and it will be a battle, but:
+ ODL is dead
+ liquidity partners dead
+ distribution schemes dead
— Ryan Bitcorn Selkis (@twobitidiot) December 23, 2020