January 19, 2020 — There appears to be different responses among local cryptocurrency exchanges in the Philippines in relation to the current legal issue that Ripple, the company with the majority of XRP token holdings, is facing in the United States. The responses fall in either of the three categories – full suspension of XRP trading, partial suspension, or no change in current policy.
Different responses
Last month, crypto exchange PDAX informed its users via email that XRP-BTC is no longer available on its platform because of limited liquidity, although the XRP-PHP trading pair remains available.
PDAX did note in the same email that in light of the U.S. SEC’s legal action vs. Ripple and XRP, it will continue to monitor the situation and will advise its clients with any relevant developments.
Bexpress Inc, which operates Bexpro, in a press release sent to BitPinas, said it is suspending all its XRP markets immediately, stating it as “a prudent measure to protect its users while the complaint filed by the U.S. SEC against Ripple Labs Inc. is being litigated in the U.S.”
Bexpress removed BTC-XRP, ETH-XRP, and PHP-XRP immediately. Users can still access their XRP wallets on Bexpro so that they can withdraw their tokens, but the deposit function is no longer available,
Coins.ph, the largest local virtual currency exchange (which was previously endorsed by Ripple as a preferred exchange for transacting with its xRapid payments service) has not yet made a clear indication of its response.
Other local exchanges Juan Exchange and Coexstar do not have XRP trading pairs, the latter appears to have paused XRP trading last March, citing pending approval from the BSP. SCI’s Rebit.ph and BuyBitcoin.ph, while now undergoing maintenance, did not have XRP buy and sell options in the past. BloomX and Moneybees primarily deal with Bitcoin to PHP transactions.
U.S. SEC vs Ripple
The U.S. SEC charged Ripple and its executives Brad Garlinghouse and Christian Larsen, for selling, and continuing to sell $1.3 billion worth of XRP tokens, which in its view, is a security. According to U.S. SEC Enforcement Director Stephanie Avakian, “We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”
Non U.S. exchanges’ responses
After the litigation is made public, a number of cryptocurrency exchanges such as Coinbase, Kraken, and Binance U.S. either suspended or delisted XRP or confirmed plans to do so. “In light of the SEC’s recent action against Ripple Labs, Inc., Coinbase plans to suspend trading in XRP on Tuesday, January 19, 2021 at 10 AM PST,” Coinbase Chief Legal Officer Paul Grewal said in a blog post. That means Coinbase will be suspending XRP trading within hours of this article’s publication.
While most exchanges suspending XRP trading are U.S.-based, a number of non-U.S. exchanges like Hong Kong-based OSL suspended XRP as well.
Volume in OSL may not be comparable to global exchanges like Bifinex, but the HK platform is highlighted because its customers are mainly institutional investors and high net-worth individuals (HNWs) in Asia.
The risk is clear, says blockchain attorney
According to Rafael Padilla, blockchain attorney and author of Fintech: First Law and Principles, it’s possible that non-U.S. exchanges suspending XRP is likely because those countries may have restrictions similar to the U.S federal securities law. “Many of these principles are now also considered international standards for securities regulation that have been developed and implemented by the International Organization of Securities Commission (IOSCO),” Atty. Padilla said in a statement to BitPinas.
The blockchain lawyer also said the fact that the Philippine securities law is adopted from the U.S. federal securities legal framework makes the risk clear.
“For my Philippine-based clients, the risk is clear. Philippine securities law is adopted from the U.S. federal securities legal framework. If the U.S. SEC strongly believes—to the point of taking enforcement action against Ripple—that XRP is a security, it is plausible that the Philippine SEC might take the same view. If the Philippine SEC would also regard XRP as a security, this could then expose Philippine-based exchanges listing XRP from the risk of facilitating the sale, purchase or trading of unregistered security in violation of the Securities Regulation Code,” Atty. Padilla said.
This article is published on BitPinas: How Different PH Crypto Exchanges are Handling the XRP Fall Out
Source: https://bitpinas.com/business/how-ph-crypto-exchanges-are-handling-the-xrp-fall-out/
