Which Exchange Would Be Hit Hardest If Ripple Loses the SEC Lawsuit?

·

The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has sent shockwaves across the cryptocurrency ecosystem. With the SEC alleging that XRP is an unregistered security, major platforms have taken precautionary steps—most notably, Coinbase, which announced on December 29 its plan to fully delist XRP trading by January 20. This move has triggered a domino effect, raising a critical question for investors and market participants: If Ripple ultimately loses the case, which cryptocurrency exchange would face the biggest impact?

This article dives into XRP’s market footprint, analyzes trading volume distribution across global platforms, and identifies the exchanges most exposed to regulatory risk tied to XRP.

The Ripple-XRP Ecosystem: A Brief Overview

Since its inception, Ripple has positioned XRP as a bridge currency for fast, low-cost international payments. While not all of Ripple’s revenue comes from XRP sales, the company has distributed significant amounts of the token over the years.

According to data from The Block, Ripple sold approximately $1.29 billion worth of XRP between 2016 and 2019, with:

Notably, Ripple ceased direct sales to exchanges after Q4 2019, shifting toward institutional placements. One prominent example was its strategic investment in MoneyGram, where Ripple provided $50 million in equity funding and supplied **$52.3 million in XRP** as “market development expenses” over several quarters.

These figures underscore how deeply XRP is woven into both retail and institutional financial infrastructure—and why its regulatory status carries such broad implications.

Who Has Already Pulled Back from XRP?

Since the SEC lawsuit was filed in December 2020, numerous firms have distanced themselves from XRP to mitigate legal exposure.

Exchanges That Suspended XRP Trading:

Market Makers & OTC Desks That Withdrew Support:

Asset Managers That Removed XRP Exposure:

👉 Discover how top exchanges manage regulatory risks and adapt to evolving crypto laws.

Even payment processor Simplex halted XRP-related transactions for U.S. users.

These actions reflect a growing consensus: while XRP remains a high-volume asset globally, its uncertain legal status makes it too risky for compliance-sensitive firms—especially those operating in regulated jurisdictions like the United States.

Why Haven’t All Exchanges Taken Action?

Despite mounting pressure, many major platforms continue listing XRP—for now. The primary reason? Revenue protection.

XRP consistently ranks among the top cryptocurrencies by daily trading volume. As of late December, it maintained a daily trading volume near $1 billion, placing it just behind Bitcoin, Ethereum, and Tether—and ahead of Litecoin, Bitcoin Cash, and Polkadot.

According to The Block’s analysis, XRP contributes 5% to 20% of total trading volume on certain exchanges. For some regional platforms, the dependency is even more pronounced:

These numbers reveal a stark reality: delisting XRP could slash platform revenues overnight. That’s why some exchanges—particularly those outside U.S. jurisdiction—have adopted a wait-and-see approach.

In contrast, platforms like Binance, Kraken, Huobi, FTX, and Bitfinex see much lower reliance on XRP, with trading volumes accounting for only 1% to 6% of their total activity. These players are better insulated against regulatory shocks related to any single asset.

FAQ: Addressing Key Reader Questions

Q: Is XRP officially classified as a security?
A: Not yet. The SEC claims it is, but no final court ruling has been issued. The outcome of Ripple’s lawsuit will set a precedent for how digital assets are regulated in the U.S.

Q: Why did Coinbase delist XRP but not other tokens?
A: Coinbase follows strict compliance protocols. Given the SEC’s explicit inclusion of XRP in its lawsuit (unlike Bitcoin or Ethereum), Coinbase chose to suspend trading to avoid potential legal liability.

Q: Can exchanges relist XRP if Ripple wins the case?
A: Yes. If the court rules that XRP is not a security, many platforms are likely to reinstate trading—possibly triggering a surge in demand and price volatility.

Q: Does Ripple control the XRP supply?
A: Ripple holds a significant reserve of XRP (about 55 billion tokens), but the total supply is capped at 100 billion. While Ripple releases up to 1 billion tokens per month via escrow, only a portion enters circulation.

Q: Are non-U.S. exchanges safer for XRP trading?
A: Generally yes. Jurisdictions like Japan, South Korea, and parts of Latin America have not declared XRP illegal, allowing local exchanges to maintain listings—though they may still face future regulatory scrutiny.

👉 Explore how global exchanges navigate cross-border compliance challenges.

The Domino Effect: What Comes Next?

Coinbase’s decision marks a turning point. As one of the most regulated and trusted U.S.-based exchanges, its actions often influence others. With Coinbase leading the charge:

Even if global trading continues, reduced availability on compliant platforms can erode long-term confidence and adoption—especially among institutional investors who prioritize regulatory clarity.

Moreover, the price impact has already been severe: XRP dropped from around $0.60 to $0.22 within ten days following the SEC announcement—a decline of over 60%.

Final Outlook: Resilience Amid Uncertainty

While the legal battle drags on—potentially lasting months or years—the crypto market has already begun pricing in risk. The key takeaway is clear: exchanges with high XRP trading concentration face the greatest financial and operational risk if Ripple loses.

Platforms like Bitbank and Bitso are most vulnerable, while diversified giants like Binance and Kraken remain relatively unscathed.

Ultimately, the resolution of this case won’t just determine XRP’s fate—it could reshape how all digital assets are classified and traded in regulated markets.

👉 Stay ahead of crypto regulatory trends with real-time insights from leading global platforms.