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Crypto payment processor Simplex has begun blocking XRP transactions in the wake of the Securities and Exchange Commission’s (SEC) lawsuit against the token’s issuing company Ripple. Simplex’s partners are also no longer accepting XRP transactions with the Simplex integration.

Simplex allows users to purchase cryptocurrency with credit cards on a variety of platforms using the Simplex integration, including Binance, Huobi, KuCoin and BitPay among others. Now, users will be unable to purchase XRP using the Simplex integration on those platforms. Simplex confirmed the decision in an email with The Block.

The SEC brought an enforcement action against XRP’s issuer Ripple and two of its executives earlier this week, citing the XRP token as an unregistered security offering. Ripple CEO Brad Garlinghouse has said the firm intends to fight the suit.  

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Today is Jay Clayton’s last day as Chairman of the Securities and Exchange Commission (SEC), according to a public statement. After announcing in November that he would depart at the end of the year, Clayton published his resignation letter to the president on the SEC’s website today.

Clayton is vacating the position months ahead of the previously scheduled end to his tenure in June of next year. He took the office in May 2017 with an appointment from President Donald Trump. 

During his time as chairman, he led the SEC through the initial coin offering boom of 2017. “Under Chairman Clayton’s leadership the agency acted quickly and decisively to combat fraud and pave the way for innovation,” the SEC said in a statement in November.

Clayton’s SEC will also be remembered by the crypto industry for denying every application for crypto exchange-traded fund. His final outgoing action related to crypto was the recent suit against Ripple and two of its executives. 

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Jump Trading, the secretive Chicago-based high-frequency trader, and Mike Novogratz’s Galaxy Digital have stopped making markets in XRP after the Securities and Exchange Commission filed a lawsuit against Ripple, according to sources.

Jump Trading is one of the most active firms in the crypto market and is known for providing liquidity to exchanges. The firm is also known for its secrecy; it reveals little information on its website aside from where its offices are located. Galaxy is another prominent crypto market maker, operating a desk that saw volumes top $1.4 billion in the third quarter.

According to three industry sources, Jump told counter-parties it would no longer provide liquidity for XRP. A spokeswoman for Jump Trading declined to comment. 

Meanwhile, Galaxy Digital has suspended trading in the digital asset until further notice. “We are not trading but will continue to evaluate as facts become available,” a spokesperson from Galaxy told The Block.

“End of an era,” a trading executive in the industry said about developments. Without proper liquidity provision in XRP markets, spreads could widen and it would become harder for investors to get in and out of large positions. 

The moves represent a big blow to the cryptocurrency, which is closely associated with San Francisco-based Ripple.

Earlier this week, the SEC sued Ripple and its co-founders Chris Larsen and CEO Brad Garlinghouse for conducting an initial coin offering to launch XRP. The sale is considered an unregistered sale of securities, in the agency’s view.

Since the suit was filed Tuesday, a number of firms have cut off support of XRP for their products. Bitwise said this morning it would liquidate its Bitwise 10 Crypto Index Fund’s 3.8% position in XRP. Elsewhere, several crypto exchanges, including OSL, CrossTower and Beaxy, have halted XRP trading.

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

In a new statement from the Securities and Exchange Commission (SEC), the U.S. securities regulator says it won’t bring enforcement actions against broker-dealers of digital asset securities that meet a number of requirements during the next five years.

The SEC is aiming to garner comments from industry players to help shape standards related to the custody of digital asset securities.

The statement does not use the terms “safe harbor” or “no action,” but does indicate that the SEC is not planning to bring actions against most digital asset security broker-dealers as it navigates how to craft new standards. Commissioner Hester Peirce referred to the statement as “guidance” in a tweet. 

“In particular, the Commission’s position, which will expire after a period of five years from the publication date of this statement, is that a broker-dealer operating under the circumstances set forth in Section IV will not be subject to a Commission enforcement action on the basis that the broker-dealer deems itself to have obtained and maintained physical possession or control of customer fully paid and excess margin digital asset securities for the purposes of paragraph (b)(1) of Rule 15c3-3,” the agency said in its statement.

Those circumstances feature a number of due diligence procedures that are subject to examination from the SEC and the Financial Industry Regulatory Authority, or FINRA. They include limiting business to only “digital asset securities” and no traditional assets, although the statement does not indicate the difference between “digital assets” and “digital asset securities.” Broker-dealers also must disclose risk to customers and implement “policies and procedures reasonably designed to mitigate risk.” That means written contingency plans for hard forks, 51% attacks, theft, and the unauthorized use of keys, among other possibilities. It also means written policies related to assessing risk of assets and their underlying technology.

In a statement outlining the amended procedure, the SEC acknowledged that the “technical requirements” for transacting and holding custody of digital asset securities is different from the traditional securities realm, and the market itself is still evolving.

The regulator says it hopes the five-year window will foster an environment in which firms are developing best practices to be shared with the SEC in the form of formal comments. 

“The five-year period in which the statement is in effect is designed to provide market participants with an opportunity to develop practices and processes that will enhance their ability to demonstrate possession or control over digital asset securities,” said the statement. “It also will provide the Commission with experience in overseeing broker-dealer custody of digital asset securities to inform further action in this area.”

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.