Hong Kong Excludes XRP, Sparking Price Drop and Concerns

February 6, 2025 BACK TO NEWS

XRP faces turmoil after exclusion from Hong Kong's approved cryptocurrencies list amid ongoing legal issues - IcoHolder.

Ripple’s XRP token is facing unexpected turmoil after being excluded from Hong Kong’s latest list of approved cryptocurrencies. The news sent shockwaves through the crypto community, triggering a sharp 12% price drop, which has left many investors and analysts wondering about the reasons behind the omission.

Why Was XRP Excluded from the Approved List?

The Hong Kong Securities and Futures Commission (SFC), known for its stringent regulatory approach, recently unveiled a limited list of cryptocurrencies approved for trading. While major tokens like Bitcoin, Ethereum, and Chainlink made the cut, XRP was notably absent. This exclusion comes as the SFC has been progressively tightening its regulatory framework for crypto exchanges, ensuring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) standards.

Experts speculate that the exclusion of XRP may stem from Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The ongoing lawsuit, which centers around whether XRP should be classified as a security or currency, has raised significant legal uncertainties. In light of this, Hong Kong’s cautious approach could reflect concerns over the potential legal implications of including XRP in the list of tradable assets.

Hong Kong’s Cautious Approach Amid Legal Uncertainty

Hong Kong has gained a reputation for maintaining a robust and high-standard regulatory environment for cryptocurrencies. While it has granted licenses to platforms like PantherTrade and YAX, only a handful of exchanges have met the SFC’s rigorous compliance requirements. The recent decision to extend the approval deadline for exchanges further underscores Hong Kong’s commitment to maintaining strict oversight over the crypto market.

XRP’s exclusion may be seen as a measure to avoid legal complications, particularly as the token's regulatory status remains ambiguous on the global stage. As Ripple continues its battle with the SEC, Hong Kong’s decision reflects a cautious stance toward assets facing uncertain legal classifications.

XRP’s Market Impact: A 12% Drop and Bearish Signals

XRP’s exclusion from the approved list didn’t just affect its reputation; it had a direct impact on its market performance. The token's price plunged by over 12%, falling to approximately $2.45, while open interest in XRP dropped to a monthly low of $3.52 billion, down from a high of $7.62 billion in January.

From a technical perspective, XRP is now trading below crucial moving averages, including the 10-day EMA at $2.48 and the 21-day EMA at $2.54. This suggests that XRP could face continued downward pressure in the near future, as traders remain cautious amid the uncertainty surrounding its legal and regulatory status.

As Hong Kong and other global regulators continue to refine their approach to cryptocurrencies, the future of XRP remains uncertain, with its price likely to be influenced by the outcome of Ripple’s ongoing legal disputes and the broader regulatory landscape.