Coinbase set XRP trading suspension after SEC sued Ripple

Coinbase announced on December 28, 2020 that it would suspend XRP trading after the U.S. Securities and Exchange Commission sued Ripple Labs and two executives. The exchange moved its XRP trading pairs into limit-only mode at 2:30 p.m. Pacific Standard Time on December 28 and scheduled full suspension for January 19, 2021 at 10:00 a.m. Pacific Standard Time.

The decision mattered because it converted a disputed securities-law allegation into a concrete restriction at a major cryptocurrency venue. The SEC had not obtained a judgment that XRP transactions were securities, and Coinbase did not present its announcement as such a ruling. Nevertheless, the lawsuit created compliance and market-structure uncertainty that the exchange was unwilling to absorb while continuing normal trading.

A legal dispute becomes a venue decision

The SEC filed its complaint in the U.S. District Court for the Southern District of New York on December 22, 2020. The agency alleged that Ripple, co-founder Christian Larsen and chief executive Bradley Garlinghouse had conducted an unregistered, ongoing digital-asset securities offering beginning in 2013.

According to the SEC’s December 22 announcement, Ripple and the two executives raised more than $1.3 billion through the alleged offering. The agency also alleged that Larsen and Garlinghouse made personal unregistered XRP sales totaling approximately $600 million. Those figures were allegations in a newly filed civil complaint on December 28, not adjudicated findings.

Coinbase tied its action directly to that case. It said it would continue monitoring legal developments and reserved the ability to halt trading earlier if required by its market-health metrics. The announcement therefore reflected Coinbase’s own compliance and operational assessment; it did not establish XRP’s legal classification across every transaction, jurisdiction or platform.

Trading stopped, but custody did not

The scope of Coinbase’s decision was narrower than a complete removal of XRP from its services. Customers retained access to XRP wallets for deposits and withdrawals after the planned trading suspension. Coinbase also said XRP would remain supported by Coinbase Custody and Coinbase Wallet, and that eligible customers would remain eligible for the previously announced Spark-token distribution, subject to jurisdictional approval.

Those distinctions were significant. A trading suspension removes an exchange-operated route for matching purchases and sales, but it does not erase balances or disable the underlying XRP Ledger. Coinbase’s notice preserved customers’ ability to transfer the asset while withdrawing its own order-book service.

Contemporaneous reporting also recorded that OKCoin had announced an XRP suspension on December 28 and that Bitstamp had already scheduled restrictions for U.S. customers. Coinbase’s action was therefore part of a developing venue response to the SEC case, although each company made its own decision and imposed different dates and service limits.

Why December 28 mattered

The development illustrated how enforcement allegations could reshape crypto markets before a court resolved the underlying legal questions. Exchanges had to decide whether continued support justified the regulatory uncertainty, while XRP holders faced fragmented access across venues and jurisdictions.

No reliable market-price calculation is included here. Contemporaneous reports described a sharp XRP decline around the Coinbase announcement, but surviving reports use venue-specific observations and short, nonuniform windows rather than a single authoritative consolidated market benchmark. The verified event is the exchange’s policy change, its stated timetable and its direct connection to the SEC action—not a reconstructed global price response.