Cryptocurrency XRP tumbled 24% on Wednesday after the U.S. Securities and Exchange Commission (SEC) charged associated blockchain firm Ripple with conducting a $1.3 billion unregistered securities offering.
XRP, the third-biggest cryptocurrency by market value, dropped to as low as $0.33, its weakest in a month, after the announcement from the SEC, which also saw two executives of San Francisco-based firm charged for personal gains they received from the offering.
Ripple has rejected the charges, saying XRP is a currency and does not need to be registered as an investment contract.
Financial regulators around the globe are still grappling with how to regulate Bitcoin, XRP and rival cryptocurrencies. Markets are watching closely for regulatory developments that could determine whether cryptocurrencies make the leap from a niche to a mainstream asset.
XRP, 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.
But after Wednesday's drop, XRP has now lost half its value since the start of December. Bitcoin traded 1.5% lower at $23,477.19.
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