Can the Ripple lawsuit be traded with Wrapped XRP to circumvent XRP delisting in US?

Rick Steves

wXRP is a derivative product that is pegged to the digital asset that the SEC claims to be a security in what has been dubbed “the cryptocurrency lawsuit of the century”.

As is widely known among XRP investors and the crypto trading industry, US-based digital asset exchanges have delisted XRP to avoid being targeted by the Securities and Exchange Commission as the agency entered a court battle against Ripple.

Crypto trading platforms kept that decision even despite the “bombshells” by Judge Netburn described by attorney Jeremy Hogan last year, including when she questioned whether “everyone who sold XRP – including you and me – are selling illegal securities”, to which the SEC attorney Jorge Tenreiro replied by saying that, under Section 4 of the Securities Act, only Ripple and its affiliates (meaning employees, Hogan said) could be accused of illegal sales. According to that argument, exchanges could resume the trading of XRP.

XRP delisted in the United States

Park Bramhall, senior counsel at Lowenstein Sandler LLP, had a different perspective: “The fact that the SEC has apparently stated that parties other than Ripple and its affiliates can resell XRP under Section 4 of the Securities Act doesn’t mean that exchanges are free to relist XRP,” he told Coindesk at the time.

“What the SEC appears to be saying here is that, in its view, parties other than Ripple and its affiliates can rely on the exemption from registration provided under Section 4(a)(1) of the Securities Act for resales of XRP, and that exemption is only relevant if XRP is deemed to be a security.”

The truth of the matter is that XRP will likely remain delisted in the United States while the Ripple lawsuit lingers, but there might be a way in for US investors who look to trade the news stemming from the court battle in New York.

FX and CFD brokers must go multi asset: Join free webinar from TraderEvolution to learn how

Wrapped XRP is a derivative product

Wrapped XRP (wXRP) has recently joined the Ethereum network. wXRP is a token pegged to XRP that can be used on blockchains other than XRP Ledger. The wrapped asset is exchangeable 1:1 with XRP held in reserve by a custodian that facilitates wrapping XRP and unwrapping wrapped XRP.

wXRP is a derivative product that is pegged to the digital asset that the SEC claims to be a security in what has been dubbed “the cryptocurrency lawsuit of the century”.

The outcome of the court case will have direct implications on Ripple and XRP, although these two words are not interchangeable. The precedent will likely dictate the course of the crypto ecosystem in the United States and potentially across the globe, given the country’s influence.

While investors outside the United States are free to trade XRP, that does not apply to US residents at the moment, but buying and selling Wrapped XRP would go under the scope of the CFTC as derivatives trading.

Ripple does not seem to be willing to give in to the SEC, so we’ll be likely following the case to the bitter end in August – September, according to attorney Jeremy Hogan.

Binance integrates wXRP

As part of the Wrapped XRP rollout, Binance has completed the wXRP integration and has opened deposits for wXRP on Ethereum (ERC20). The crypto exchange will open withdrawal for wXRP on Ethereum Network (ERC20) on a later date.

wXRP deposits will be credited as XRP and it is ready for trading. Withdrawals of XRP on Ethereum Network (ERC20) will be wXRP.

Read this next

Metaverse Gaming NFT

Despite crypto winter, Fastex grabs $23.2 million in Fasttoken token sale

Fasttoken, part of the Fastex web3 ecosystem, has secured $23.2 million in financing through the private and public token sales of its native cryptocurrency Fasttoken (FTN).

Digital Assets

Iran to repay Russian debts in gold-backed stablecoins

A high-ranking member of the Russian parliament confirmed reports that his country was in talks with Iran to create a stablecoin for foreign trade settlements, to replace the dollar, ruble and Iranian rial.

Digital Assets

SEC denies Cathie Wood’s bitcoin ETF for second time

The approval of a regulated crypto derivative is still looking far less likely, as the US regulators have once again denied Cathie Wood’s application for a long-awaited spot bitcoin exchange-traded fund (ETF).

Executive Moves

Pavel Spirin promoted to Scope Markets CEO following Rostro acquisition

Belize-based FX and CFDs brokerage Scope Markets has promoted Pavel Spirin to take on an expanded role as the company’s chief executive officer. He replaces the outgoing CEO Jacob Plattner, who has also been a major shareholder since he resigned his position as managing director at GKFX.

Retail FX goes all-in on alternative investing, launches Rare Sneaker Portfolio

“The concept of curated Portfolios means that our members will be able to invest in categories like art, trading cards, royalties, and real estate without needing to become subject matter experts on individual assets.”

Industry News

State Street taps AWS and Microsoft for cloud and infrastructure solutions

“By standardizing and simplifying our technology operating model, we will be able to more quickly deploy client environments and launch new products and services, while continuing to enhance the resiliency of our technology environment and our business operations.”

Institutional FX

Bitpanda launches Investment-as-a-Service business for banks, fintechs, online platforms

“Financial institutions today have to ask themselves how they aim to cater the increasing demand for modern investing solutions. Building these Individually, means a high startup cost, and products that are often outdated before they are even launched.”

Institutional FX

Options expands market data feeds after partnership with Tools for Brokers

“Our integration with ACTIV Financial marked the beginning of a new era in market data availability and infrastructure. Our teams have come together to provide unparalleled, fully managed market data services alongside Options’ global connectivity and infrastructure.”

Industry News

Recruitment in financial services sector buoyant despite planned mass layoffs

“It remains to be seen what impact this will have on hiring levels within the financial services arena this quarter”, said APSCo, regarding the expected mass layoffs within the financial services sector in England & Wales.