Revolut warns that cryptocurrency XRP could become worthless

Revolut has warned customers that XRP, formerly the third-biggest cryptocurrency by market value, could become worthless.

The warning comes two weeks after the US Securities and Exchange Commission (SEC) charged associated blockchain firm Ripple with conducting a $1.3 billion (€1.06 billion) unregistered securities offering.

The value of XRP has tumbled in recent weeks on the announcement. The cryptocurrency, 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. However, it has since lost more than half its value, while bitcoin on Sunday hit a new all-time high above $34,600 on the same day the flagship cryptocurrency marked the 12th anniversary of its creation.

XRP was trading at $0.25 on Tuesday, down from a close of $0.55 the day before the Ripple charge was announced.

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In a note sent to customers, Revolut warned that although it was still possible buy and sell XRP on its platform, some exchanges had started to delist the cryptocurrency.

It said the price of XRP was volatile and that if one of its partner exchanges were to decide to delist the currency, it might have to follow suit.

“We might also have to halt trading with very little notice if the liquidity on our partner exchanges drops and we can no longer buy or sell XRP. This would mean you might not be able to sell your XRP balance and could be stuck with a holding for which the price could drop to zero, in a worst-case scenario,” Revolut said.

Advance notice

The fintech does not currently offer a service to allow users to withdraw their XRP balance to an external wallet. It said that although it would try to give advance notice if it had to suspend the buying and selling of the currency, it might not be able to do so.

“It’s important that you constantly reassess your crypto holdings, specifically XRP, and whether you remain comfortable with the associated risks,” Revolut said. “In particular, it’s a good idea to regularly check your buy and sell orders – including any recurring buys and auto-exchanges that you may have set up – to make sure you are still as happy with them as the time when you set them up.”

The company, which has one million customers in the Republic of Ireland, said it would continue to monitor the situation with Ripple and the responses taken by its partner exchanges.

Revolut users held some $120 million worth of cryptocurrencies in 2019, up 152 per cent on the previous year. The company first started selling access to cryptocurrencies in 2017 with support for bitcoin, either and litecoin.