Binance Cuts Ties With XRP Leveraged Tokens As SEC Lawsuit Escalates – Coinpedia Fintech News
Binance, the leading cryptocurrency exchange, has announced its decision to delist and discontinue the redemption of XRPUP and XRPDOWN leveraged tokens, effective from July 25, 2023, at 06:00 (UTC). This move comes at a critical juncture as both Binance and Ripple, the parent company of XRP, are embroiled in lawsuits filed by the US Securities and Exchange Commission (SEC).
Let’s explore the potential impact of this decision on the XRP token and the broader cryptocurrency industry as a whole.
Delisting Galore!
Binance has officially declared the delisting of its XRPUP and XRPDOWN leveraged tokens, which will take effect on July 25. Users are advised to redeem their tokens using the wallet feature before the specified date, as these leveraged tokens, enabling users to take long or short positions on $XRP, will no longer be accessible on the platform.
In accordance with the announcement, if users choose to retain their leveraged tokens following the delisting, Binance will convert them into Tether’s USDT stablecoin. The conversion will be based on the tokens’ net asset value at that particular time.
Read More: XRP Lawyer Considers Amicus Status for Coinbase and Binance Users
So… What Are the Implications for XRP?
These leveraged tokens offer traders the opportunity to magnify their exposure to specific cryptocurrencies like XRP. Their values fluctuate in accordance with the price movements of the underlying cryptocurrency, facilitated by a sophisticated algorithm that adjusts the token’s leverage dynamically in real time.
Earlier this year, Binance eliminated 21 spot trade pairs from the market. Notably, eight of these trading pairs involved cryptocurrencies such as Avalanche (AVAX), Axie Infinity (AXS), Polkadot (DOT), Fantom (FTM), Chainlink (LINK), Sandbox (SAND), and Shiba Inu (SHIB), paired with the Australian dollar (AUD).
Legal Uncertainty Weighs Heavy
The delisting comes at a time when Binance and Ripple are facing ongoing lawsuits filed by the SEC, accusing both parties of securities law violations. These lawsuits have cast a shadow of uncertainty over the future of XRP.
In recent weeks, the price of XRP has remained stagnant, fluctuating between $0.47 and $0.49, primarily due to the uncertainties surrounding these legal developments. Interestingly, despite the circumstances, a group of institutional investors have taken long positions in XRP. However, over the past seven days, the token price has experienced a decline of more than 2%.
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