In a recent development, the leading cryptocurrency exchange, Binance, has revealed its decision to delist and discontinue the redemption of XRPUP and XRPDOWN leveraged tokens starting from July 25, 2023, at 06:00 (UTC). This announcement comes at a time when Binance and Ripple, the parent company of XRP, are both dealing with lawsuits against the US Securities and Exchange Commission (SEC).
Let’s explore the potential impact of this decision on the XRP token and the broader cryptocurrency industry as a whole.
Delisting of XRPUP and XRPDOWN Leveraged Tokens
Binance made an announcement regarding the delisting of its XRPUP and XRPDOWN leveraged tokens, scheduled to take effect on July 25. Users have been advised to redeem their tokens using the wallet feature prior to the specified date, as both leveraged tokens, which allow users to take long or short positions on $XRP, will no longer be available on the platform.
How Does Delisting Affect XRP
As per the announcement, if users choose to hold onto their leveraged tokens after the delisting, Binance will convert them into Tether’s USDT stablecoin. The conversion will be based on the net asset value of the tokens at that specific time.
These leveraged tokens provide traders with an opportunity to amplify their exposure to specific cryptocurrencies, such as XRP. The tokens’ values fluctuate in accordance with the price movements of the underlying cryptocurrency, facilitated by a sophisticated algorithm that dynamically adjusts the token’s leverage in real time.
Earlier this year, Binance removed 21 spot trade pairs from the market. Notably, eight of these trading pairs involved cryptocurrencies like Avalanche (AVAX), Axie Infinity (AXS), Polkadot (DOT), Fantom (FTM), Chainlink (LINK), Sandbox (SAND), and Shiba Inu (SHIB) paired with the Australian dollar (AUD).
Impact On the Price Of XRP
The delisting occurs at a time when Binance and Ripple have ongoing lawsuits filed by the SEC against both Binance and Ripple, two significant participants in the XRP market. These lawsuits allege violations of securities laws.
In recent weeks, the price of XRP has remained stagnant, hovering between $0.47 and $0.49, largely due to the looming uncertainty surrounding these legal developments. Interestingly, despite this, a group of institutional investors have taken long positions in XRP. However, over the past seven days, the token price has experienced a decline of over 2%.
