Institutional investors engrossed in buying XRP might have to look somewhere else.
A week after selling all the XRP in its Digital Large Cap Fund, Grayscale Investments terminated its XRP Trust.
Grayscale’s recent announcement directly referenced the US Securities and Exchange Commission’s $1.3 lawsuit brought last month against Ripple Labs, the igniting creative force behind the cryptocurrency, and also CEO Brad Garlinghouse and Executive Chairman Chris Larsen. The SEC had targeted the defendants for their role in selling XRP, which the agency supposed as an unregistered security.
XRP is the third-largest cryptocurrency by market cap.
Today’s press release said that it is Grayscale’s view “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.”
Thus, it will reimburse the trust and distribute the proceeds to shareholders, excluding fees.
“The Trust will terminate following distribution of the net cash proceeds,” it said.
This is another bad news for Ripple and XRP, which is being delisted by exchanges like Coinbase. But things are less dire in Asia. According to recent reports that Japan’s Financial Services Agency – equivalent of the SEC – stated that XRP is not a security, but a cryptocurrency.
Notwithstanding Grayscale’s move, the price of XRP is up for the day by almost 5%, although its market cap of $13.8B is only over half of what it was during the week leading up to the SEC enforcement action.
The Grayscale XRP Trust is an investment product that allowed people to invest in XRP as though it were a stock rather than investing in XRP. In exchange for a fee, Grayscale managed custody of the digital asset. Grayscale also offered Bitcoin and Ethereum Trusts, together with other products.
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