Revolut has cautioned its users against trading turbulent cryptocurrency XRP in light of the lawsuit against its parent company Ripple.
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Digital banking service Revolut has issued a warning to its customers about Ripple’s cryptocurrency XRP after several exchanges began delisting the electronic currency.
Ripple found itself in hot water after the Securities and Exchange Commission (SEC) in the US sued Ripple and two executives over claims that they fraudulently sold $1.3bn of XRP in an unregistered sale.
In a blog post, Revolut told customers that as long as its partner exchange continues to trade XRP, they will still be able to buy and sell the asset through the Revolut app.
The post went on: “If XRP was to be delisted by all of our partner exchanges, it’s likely that we would have to delist XRP as well. We might also have to halt trading with very little notice if the liquidity on our partner exchanges drops and we can no longer buy or sell XRP.”
“This would mean you might not be able to sell your XRP balance and could be stuck with a holding for which the price could drop to zero, in a worst-case scenario.”
XRP is currently trading at around $0.32 per coin, a drop in the ocean compared to fellow cryptocurrency Bitcoin, which, at the time of writing this article is currently sitting at nearly $41,000 per coin.
In a Twitter thread, CEO of Ripple Brad Garlinghouse tried to explain the situation with the SEC in greater detail.
Garlinghouse tweeted: “I’m not going to litigate the SEC’s unproven allegations on Twitter, and as you can imagine, there are new considerations to what can / should be said publicly after the litigation process starts.”
The CEO answered five main questions about the crypto asset, bemoaning the tricky regulatory landscape in the US as he went, and revealed that 95 per cent of XRP trading takes place outside of the US.
Despite still trading the cryptocurrency, Revolut reminded its customers just how volatile XRP is and that the lawsuit’s outcome could impact the price and regulatory status of XRP across the world.
In 2020, Revolut users turned to cryptocurrency trading to pass the time under lockdown.
Earlier in the year, Revolut made crypto trading, as well as gold and silver trading, free for all customers following a surge in popularity.
Between 20 April and 4 May, the average amount of cryptocurrency purchased jumped by 57 per cent and the amount bought per trade by 63 per cent.
In a two month period, from 16 March to 18 May 2020, users in the UK bought an average of £399 per week of cryptocurrency, whereas their European counterparts bought 30 per cent less, £280 per week.
Following the surge of popularity, Revolut also announced a competition for its users to be in with the chance of winning one whole Bitcoin for Black Friday, although at the time of the competition the price of one Bitcoin was around $18,000.