The cryptocurrency community is buzzing with the news that Hong Kong Virtual Asset Rating Agency (HKVAC) has decided to drop XRP from its Cryptocurrency Global Large Top5 Index.
This index tracks the performance of the five largest cryptocurrencies by market capitalization. The change will take effect on Jan. 19, according to a recent announcement by HKVAC.
Why did HKVAC remove XRP from its index?
The agency cited the ongoing legal dispute between Ripple, the company behind XRP, and the US Securities and Exchange Commission (SEC), which has accused Ripple of conducting an unregistered securities offering.
The SEC’s lawsuit has caused many exchanges and platforms to delist or suspend XRP trading, resulting in a significant loss of liquidity and market value for the cryptocurrency.
HKVAC said that it aims to provide investors with reliable and objective ratings of virtual assets, based on factors such as technology, innovation, market acceptance, regulation, and governance.
The agency said that XRP no longer meets its criteria for inclusion in its index, due to the uncertainty and risk surrounding its legal status and prospects.
How will this affect the cryptocurrency market?
The removal of XRP from HKVAC’s index could hurt the perception and confidence of investors in XRP, as well as other cryptocurrencies that may face similar regulatory challenges.
On the other hand, it could also create opportunities for other cryptocurrencies to fill the gap left by XRP, and gain more exposure and recognition in the global market.