Binance Removing XRP Leveraged Tokens Amid SEC Lawsuits

Binance to delist XRP leveraged tokens amidst legal battles with Ripple and SEC over unregistered securities.

Man one step below, and it balanced XRP token to the top.
Created by Kornelija Poderskytė from DailyCoin
  • Binance has recently announced the delisting of XRP leveraged tokens.
  • Users are urged to redeem their tokens before July 25th.
  • SEC lawsuits against Binance and Ripple Labs have added complexity to the situation.

Binance, a leading cryptocurrency exchange, has recently announced the delisting of its XRP leveraged tokens. This decision, set to take effect on July 25th at 6 am UTC, comes amidst ongoing legal battles between Binance and Ripple Labs, both facing lawsuits from the U.S. Securities and Exchange Commission (SEC) over the alleged sale of unregistered securities.

Prepare for the Delisting of XRP Leveraged Tokens on Binance

As per Binance’s official statement, both leveraged tokens XRPUP and XRPDOWN, which allow users to gain exposure to long or short positions on XRP, will be removed from the platform on the specified date. Users are strongly advised to redeem their tokens using the wallet function before delisting.

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If users still possess these leveraged tokens after the delisting, Binance will convert them into Tether’s USDT stablecoin based on their net asset value. Leveraged tokens allow traders to amplify their exposure to specific cryptocurrencies like XRP. 

Understanding 3x Long Leveraged Tokens Tied to XRP

By utilizing a sophisticated algorithm that adjusts the token’s leverage in real time, these tokens fluctuate along with the price movements of their underlying cryptocurrency. This essentially means that as the value of XRP increases, the leverage of its associated token also rises, and vice versa.

For example, a 3x long leveraged token tied to XRP aims to reflect three times the daily percentage fluctuation of XRP’s price. Consequently, when XRP experiences a 1% increase, the token ideally surges by 3%. However, this mechanism operates in both directions, so if XRP drops by 1%, the token is expected to decline by 3%.

The delisting decision coincides with the ongoing legal challenges both Binance and Ripple face. The SEC accuses them of violating securities laws in different ways.

On the Flipside

  • Delisting XRP leveraged tokens could be interpreted as a strategic move to align with regulatory expectations and demonstrate a commitment to operating within legal boundaries.
  • The delisting of XRP leveraged tokens does not impact the availability of XRP itself on Binance’s platform.
  • Users can still trade, hold, and transact with XRP as a standalone cryptocurrency. The delisting pertains explicitly to the leveraged tokens associated with XRP, highlighting a distinct focus on risk management and regulatory compliance.

Why This Matters

The delisting of XRP leveraged tokens by Binance amidst ongoing legal battles carries substantial implications. This move signals the intensifying scrutiny faced by both Binance and Ripple from regulatory authorities, raising concerns about compliance and the future of cryptocurrency trading platforms.

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To learn more about how XRP whales are capitalizing on price fluctuations, read here:

XRP Whales Capitalize on Price Fluctuations to Tune of $570M

To stay updated on the recent debunking of Binance discount USDT misconceptions by Tether’s CTO, click here:

Tether CTO Debunks Binance’s Discount USDT Misconceptions

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.