- Coinbase Justifies XRP delisting, citing statements for the SEC senior staff.
- The crypto exchange wants to use the statements as evidence for a fair notice defense.
- Coinbase will defend its position to protect BTC and ETH trading on its platform.
According to the lawyer and digital assets enthusiast Bill Morgan, the Coinbase cryptocurrency exchange relies on the views of some senior staff of the Securities and Exchange Commission (SEC) to justify its delisting of XRP as Ether and Bitcoin continue to trade on its platform.
Morgan tweeted Coinbase extracted the views it referred to from a letter written by the SEC on December 7, 2020, where it asked Coinbase to change its draft registration statement. According to him, Coinbase wants to use the extract as evidence that at least it has a fair notice defense for Bitcoin and Ethereum.
Morgan further explained that the revision the SEC requested did not disturb the part of the statement Coinbase would include in the registration, which refers to comments by its top officials. Hence, Coinbase would rely on such evidence to argue a fair notice defense for at least Bitcoin and Ethereum.
While explaining the situation, Morgan referenced the importance of Bitcoin and Ether trading on Coinbase as the reason the exchange would continue to defend its position. According to the lawyer, Coinbase’s draft registration statement showed that 65% of the trading on its platform in the six months up to June 2020 was Ethereum and Bitcoin.
Morgan believed that even if there was a proceeding in which the SEC named Bitcoin and Ethereum as securities, there was no way Coinbase would cease trading both digital assets without being wrecked financially. Hence, XRP was easier to sacrifice in the heat of the moment.
In January 2023, Coinbase exchange delisted Ripple’s XRP from its trading platform, citing low usage. The crypto exchange notified users with XRP in their balances after delisting that they could recover them via the “Coinbase Recovery Phase.” Coinbase suspended XRP trading on its platform in January 2021 amid SEC’s lawsuit against Ripple’s Lab.
Morgan believes Coinbase’s recent decision to delist XRP and the ongoing decision not to relist the same are inconsistent and inconvenient.