Phemex, an exchange that suspended XRP trading after the SEC lawsuit on December 31st, 2020, has now relisted XRP.
Phemex suspends XRP trading
Phemex, an exchange founded in 2019 in Singapore, suspended XRP trading on December 31st, 2020. According to the exchange’s announcement at the time:
“Following the news of the SEC’s lawsuit against Ripple Labs, Inc. and the resulting actions by a number of other exchanges, we have decided to suspend XRP from next week.”
Under the impression created by the Securities and Exchange Commission that exchanges or companies using XRP were violating the US securities law, dozens of exchanges in the US and across the Globe delisted XRP.
It was on March 19th in a court hearing that SEC attorney Mr. Tenreiro replied to the court’s question whether every individual in the world who was selling XRP was committing a violation:
“That’s not quite correct, your Honor. So the statute, the Securities Act of 1933 has sort of a registration provision under Section 5, and then an exemption provision under Section 4. And broadly speaking, the Section 4 exemptions, I’m speaking very generally here, if these are transactions by people in the market, they are exempted by statute.
Section 5, though, focuses on and is relevant to this case, the issuer and the affiliates of the issuer. So it is only Mr. Larsen and Mr. Garlinghouse, the CEOs, or someone on the board. The affiliates of the issue are captured by the statute. Section 4 specifically exempts these transactions that the court put in the hypothetical of all these other people buying and selling XRP in the market. I don’t think that would be the case, your Honor.”
His answer clarified that only Ripple and its affiliates allegedly violated the securities law by selling XRP illegally, meaning that exchanges or other companies that are utilizing XRP are not in violation of the securities law and can continue doing so.
Phemex Relists XRP
On April 28th, Phemex announced that XRP would be relisted on its platform, due to popular demand.
We are happy to announce that Phemex is offering spot and contract trading for 8 new coins! Additionally, due to popular demand, we are also bringing $XRP back onto the platform!
Check out the details below! 👇
— Phemex (@Phemex_official) April 28, 2021
When the SEC lawsuit was first filed, exchanges and other companies across the world may have acted hastily to protect their best interests. With more details on the SEC lawsuit coming out, exchanges may and should re-evaluate their stance toward XRP.
While the SEC’s mission is to protect investors, XRP holders that have sold at a loss due to the SEC’s actions have watched the asset rise by more than 300% since the lawsuit was filed. Even if the SEC wins the lawsuit against Ripple and its executives, it should be held accountable for its inability to protect investors, and the way in which it filed this suit failing to provide clarity to exchanges.