How will Coinbase solve the XRP problem? Here Are The Latest Developments
Cryptocurrency followers began to wonder if XRP would be delisted on the exchanges after the SEC’s XRP lawsuit against Ripple. While some exchange and trading desks have already decided in this direction, it is especially curious how Coinbase, a US-based cryptocurrency company such as Ripple, will follow. So what options do Coinbase have?
Cinneamhain Ventures partner Adam Cochran has made new statements about how the US cryptocurrency exchange Coinbase may react to the XRP case. Cochran, who said that Coinbase could completely remove XRP from the stock market during the day, gave a message that the stock market could also resort to alternative ways with his later statements.
Why is Coinbase having trouble with XRP?
Defining any financial product as a securities means that it is subject to different laws when it comes to trading compared to cryptocurrencies such as Bitcoin and Ether. Global trading platforms allow other countries to buy and sell assets that the United States defines as securities (depending on the situation).
The XRP case concerns Coinbase more closely than most other cryptocurrency exchanges. Because Coinbase is a US-based company, just like Ripple, the fact that XRP is considered securities may mean that Coinbase cannot also serve XRP investors outside the US. This also remains unclear, as the legal status of XRP is unclear.
Is there an alternative way to follow XRP?
Adam Cochran explained that Coinbase is considering several different scenarios. Although Coinbase is a US-based company, it also operates in different countries. For this, the company opened two different branches in the United Kingdom and Japan.
The company is reportedly considering transferring XRP services to these branches outside the US. But according to research, The Japan branch of Coinbase is not a different company and operates in a way connected to the parent company in the United States. The branch is not known to have received a license from the financial regulator in Japan.
Direction across the Atlantic?
For Coinbase, which has begun evaluating alternatives to XRP, Japan does not seem to be a suitable choice. The UK, on the other hand, is more promising for XRP at first glance. One of Ripple’s arguments in the U.S. lawsuit is that XRP is not considered securities in the United Kingdom.
But Cochran’s statement says that claim is not based on solid foundations. Although the FCA, the UK regulator, has so far suggested in its reviews of XRP that it “exhibits features similar to Ethereum,” it has not yet made a sharp judgment that XRP is not securities.
Coinbase is therefore not keen on the UK idea. It was stated that the company conducted international money transfers, Coinbase debit card and SWIFT transactions through this branch and did not want to risk this branch in any way.
Circle Narrows for Coinbase and XRP duo
Coinbase’s area of action on XRP appears to have narrowed as a result of these assessments. Cochran claims that if a middle ground is not found in the XRP case, there will be no option “except to stop Coinbase’s XRP transactions or to completely delist it.” The famous investor summed it up with the following words::
“Although Coinbase is trying to avoid this situation by taking as little damage as possible, it is currently cornered. If the issue cannot be clarified from a legal point of view, there will be no option but to delist the XRP. Even if such clarity is made, perhaps they will only be able to offer custody (storage) services for XRP. In such a case, the number of trading desks that stop using XRP may increase. To sum it up, things are either going to be bad for Ripple or worse.