The Coinbase wallet will no longer support native tokens for Stellar, XRP Ledger, Ethereum Classic, or Bitcoin Cash. The decision has sparked speculation in the cryptocurrency industry as to what it may entail in the current SEC case against Ripple.
What caused this decision?
Due to minimal activity on the networks, the US cryptocurrency exchange Coinbase has stated that starting in January 2023; it would stop supporting XRP, Bitcoin Cash (BCH), Ethereum Classic (ETC), and Stellar (XLM) (1). According to a statement released by the exchange on Tuesday, stating that the Coinbase Wallet will no longer support the following assets and networks due to low usage: BCH, ETC, XLM, and XRP, BCH, and Bitcoin Cash were split from the code of the Bitcoin network in 2017 to compete with the biggest cryptocurrency (BTC).
What impact would this have?
According to statistics from CoinMarketCap (2), the cryptocurrency is presently valued at more than $2 billion and ranks #27. Similarly, Stellar (XLM) is a decentralized P2P network and cryptocurrency for cross-border payments. At the same time, Ethereum Classic is a fork of Ethereum that split off after a hack on the main network. According to the exchange, the delisted tokens kept in customers' accounts will continue to exist and may still be retrieved using the Coinbase Wallet recovery password.
After January 2023, the business stated that users would need to import their recovery phrase into another non-custodial wallet service that supports these networks to see or transfer these assets. It also advised users to "double-check" If Coinbase Wallet does not support the network from which they are getting assets, they will not be able to access those assets.
The speculation grows
The exchange's action prompted concerns about the potential outcome of the current dispute between the US Securities and Exchange Commission (SEC) and XRP issuer Ripple Labs. Recently, Coinbase requested (3) to be added to the case as an "amicus curiae" to help the lawsuit's defendant, Ripple.
The cryptocurrency community is already anticipating that the lawsuit against Ripple will either be postponed or go against the business in light of Coinbase's conduct. Some critics of the move argue that most XRP users aren't in the US and that the change is irrelevant.