XRP, the third-biggest cryptocurrency, was last down 18.7 percent at an intra-day low of $0.20, its lowest since July.

Representation of the virtual currency Ripple coin is seen on a motherboard in this picture illustration taken April 24, 2020.
Representation of the virtual currency Ripple coin is seen on a motherboard in this picture illustration taken April 24, 2020. (Dado Ruvic/Illustration / Reuters)

Cryptocurrency XRP has slumped 19 percent after Coinbase, a major US virtual coin exchange, said it would suspend trading in the digital currency.

California-based Coinbase said on Tuesday it would suspend trading in XRP after the US Securities and Exchange Commission (SEC) last week charged an associated blockchain firm, Ripple, with conducting a $1.3 billion unregistered securities offering.

Ripple has rejected the charges, saying XRP is a currency and does not need to be registered as an investment contract.

The SEC maintains that former Ripple head Christian Larsen and current chairman Brad Garlinghouse "failed to register their offers and sales of XRP or satisfy any exemption from registration."

XRP, the third-biggest cryptocurrency, was last down 18.7 percent at an intra-day low of $0.20, its lowest since July. It has slumped by over half since the SEC move.

The move by Coinbase comes as it prepares for a stock market listing, with a confidential application to the SEC to go public. It would be the first major US crypto exchange to list on the stock market.

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Coinbase, one of the most well-known cryptocurrency platforms said trading in XRP moved into limit only from Monday and would be fully suspended on January 19.

Whereas bitcoin is produced by a decentralised network of 'miners', Ripple's XRP token is mainly controlled by the firm that bears its name.

Financial regulators around the globe are still grappling with how to regulate bitcoin, XRP and rival cryptocurrencies. Investors are watching for regulatory developments that could determine whether cryptocurrencies leap from a niche to a mainstream asset.

XRP, which often moves in tandem with Bitcoin, had rocketed in November to hit its highest level since 2018 as a rally in cryptocurrencies gathered pace.

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Source: Reuters