Coinbase, the dominant US-based crypto exchange that was once known for only offering Bitcoin, Litecoin and Ethereum, has been on a coin listing spree.
After listing Ethereum classic, Steller, Cardano, Basic Attention Token, Zcash and 0x earlier in the year, the company recently announced that they would be ‘exploring’ whether or not to list 30 more tokens on their exchange.
Among the 30+ tokens being explored is none other than XRP, the token that many in the crypto space have suspected Coinbase or curving for months for unknown reasons.
Almost every announcement of a new token to be added on Coinbase would create an uproar amongst members of the XRP community who feel that their favorite coin is unfairly omitted.
There are several reasons why Coinbase may be hesitant to list XRP. For most of 2018, Ripple has been involved in a class action lawsuit filed by investors who feel that they were sold unregistered securities when they bought XRP. They claim this led to significant financial losses, and are also accusing Ripple of manipulating the markets. The plaintiffs are seeking a settlement of $5 million.
The case has now been taken to Federal Court, with Ripple arguing that XRP is not a security and that the company and the cryptocurrency are separate entities. Ripple lawyers believe moving the case the federal court will give them an advantage because Federal Court has been known to favor corporate defendants.
Regardless of how the case turns out, such a high profile lawsuit is unlikely to have been ignored by Coinbase, which would make sense to be the primary reason why they have been hesitant to list XRP.
US Regulations First
Unlike Binance, Kucoin or other major exchange, Coinbase is aiming to position itself as one of the most regulatory compliant exchanges. This is likely because it is the only way they can tap into the American institutional investor base, and hopefully one day launch their own Bitcoin ETF. Prematurely listing a token that is currently involved in a legal case which could determine if it is, in fact, an unregistered security would be too risky for Coinbase and its users. The fact that XRP is now the second largest cryptocurrency by market cap only magnifies that risk.
“The court case may take years.”, Says CZ – Binance CEO, “But if XRP is ruled as a security, it would seriously hurt a lot of US users, and to a certain extent, other users around the world too. It certainly doesn’t look like a security to me, but that’s just one person’s opinion.”
Therefore, we are likely to see many other smaller, less significant tokens may their way onto Coinbase before XRP gets approved if it ever does.