The American branch of Israeli trading platform eToro has announced that it will suspend trading of XRP tokens following a looming legal battle between Ripple and the US Securities and Exchange Commission.
The company made the announcement on New Years Eve, following in the footsteps of several major American-based cryptocurrency exchanges that have taken similar courses of action towards the embattled XRP token.
The company and two of its executives are facing a legal battle with the SEC after the regulatory body filed a lawsuit which alleges that Ripple has been carrying out unregistered securities offerings through the sale of XRP over the past few years.
Ripple CEO Brad Garlinghouse maintains that XRP is not a security and has vowed to take the SEC on in court to prove their case. Garlinghouse also labelled the SEC’s lawsuit as an attack on the entire cryptocurrency community, and called for the wider space to give the company a chance to prove their case.
In response to the upcoming legal proceedings against Ripple and its executives, eToro USA has taken a decision to suspend all purchases of XRP and prohibit conversions of the token held in all US customers wallets from 12pm (EST) on January 3.
Users that have existing XRP positions on the trading platform will have until January 24 to close their positions by creating sell orders. The company also warned that it could suspend any and all services at any time in reaction to any potential changes in market or regulatory conditions.
The prohibitions on XRP trading only affect American users while the storage of XRP in eToro wallets will remain unaffected, meaning users can still hold their tokens if they want. Users will also be able to continue transferring XRP tokens to and from eToro wallets.
Coinbase facing legal action
Cryptocurrency exchanges seem to be taking precautionary measures in order to avoid any unwanted legal consequences of continuing to support XRP trading. More exchanges could follow suit after it was announced that Coinbase was facing a class action lawsuit for allegedly receiving commissions from illicit XRP sales.
As TokenAndCrypto previously reported, Coinbase is being accused of continuing to offer XRP to its customers and earned commission from trading while being aware that the token was classed as a security.