It has been a disappointing start to the week for the cryptocurrency market. With heavy declines being seen across the board, the value of the entire market has dropped to US$436 billion according to Coin Market Cap.
The two largest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), have been major drags on the market on Monday.
At the time of writing the Bitcoin price is down 4.7% since this time yesterday to US$9,352.98 per coin, reducing its market capitalisation down to just under US$159.2 billion.
The Ethereum price performance has been even worse and is down almost 7.5% during the period to US$754.88 per token, leaving it with a market capitalisation of just over US$74.9 billion.
But the worst performing major cryptocurrency over the last 24 hours has been Ripple (XRP).
The XRP price is off almost 8.5% over this time to 82.6 U.S. cents. This heavy decline has reduced its market capitalisation down to just under US$32.4 billion.
Why is Ripple (XRP) being crushed today?
As well as being hit by general profit taking in the cryptocurrency industry after the impressive gains of the past couple of weeks, Ripple appears to have come under additional pressure from news that the company behind the cryptocurrency has been hit with a class action.
According to Bloomberg, Ripple Labs has been hit with a lawsuit that alleges that it led a scheme to raise hundreds of millions of dollars through unregistered sales of XRP tokens.
The plaintiff, investor Ryan Coffey, alleges that the San Francisco-based company created billions of XRP out of thin air before profiting by selling them to the public through a never-ending initial coin offering.
Traders may be concerned about the repercussions that will be felt if Ripple Labs ultimately loses the court battle.
Though at this stage it is worth noting that no lawsuit has been served to the company. According to a Ripple Labs spokesperson, “We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time.”
I’ll be certainly watching the situation carefully to see how it develops over the coming weeks.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.