- Major crypto asset manager Grayscale is dissolving its Grayscale XRP Trust product
- The company has sold the XRP held by the trust and will be distributing the proceeds to shareholders
- Grayscale explained the move by citing the response of cryptocurrency market participants to the SEC alleging that XRP is a security
Grayscale has liquidated the XRP held by the Grayscale XRP Trust
Grayscale, an asset manager that offers cryptocurrency investment products that can be accessed through the traditional market infrastructure, says it has commenced the dissolution of its Grayscale XRP Trust product.
Like many other recent developments impacting XRP, Grayscale’s decision comes in the wake of the SEC’s lawsuit against Ripple, in which the regulator is claiming that XRP is a security issued by Ripple. Following the lawsuit, numerous cryptocurrency trading platforms that serve U.S. customers have either announced that they will be limiting their XRP-related services or delisting XRP altogether.
Grayscale explained its rationale behind dissolving its XRP Trust in a press release published on Wednesday:
»In response to the SEC’s action, certain significant market participants have announced measures, including the delisting of XRP from major digital asset trading platforms, resulting in the Sponsor’s conclusion that it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.«
Grayscale says that it has sold the trust’s XRP holdings and will distribute the proceeds to investors who own shares in the XRP Trust.
Grayscale’s flagship product, the Grayscale Bitcoin Trust, currently holds over $20.8 billion worth of BTC. Its second most popular product, the Grayscale Ethereum Trust, holds over $3 billion worth of ETH.
01/13/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.January 13, 2021
XRP is not considered a security in other major markets
Even though the legal status of XRP is now under question in the United States, the coin is not considered a security in other major markets like Japan, Singapore and the United Kingdom. Crypto news outlet The Block recently contacted the Japanese Financial Services Agency (FSA), who clarified that they classify XRP as a »cryptocurrency«. A FSA spokesperson stated:
“FSA regards XRP as a cryptocurrency based on definitions of the Payment Services Act. FSA refrains from making comments about other authorities’ response.”
With a market cap valuation of $12.7 billion, XRP is currently the 4th largest crypto asset by market capitalization. DOT, the native asset of the Polkadot blockchain, is closing in on the 4th spot – the token has a market cap of $11 billion following a massive 35% increase in the last 24 hours.
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