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Grayscale delists XRP from its Digital Large Cap Fund

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Grayscale, a digital asset management firm with over $10 billion in digital assets under management, has removed Ripple from its Digital Large Cap fund. The DLC fund is a large fund that rechecks cryptocurrency exposure and top-performing tokens every quarter. The announcement was made via the official Twitter account of Grayscale Investments.

Following the quarterly review on December 31, Grayscale has decided to remove Ripple and has updated its list for the quarter. However, it will not be assigning any other digital asset to take Ripple’s place, at least not yet.

A big decision from Grayscale

Grayscale is one of the biggest holders of cryptocurrencies and pioneer contributors in the crypto industry. As a regulated platform, it offers its users the opportunity to gain exposure to crypto price volatility without experiencing the common risks associated with a relatively new financial market.

The platform also has the license to sell securities. So the decision to delist XRP is not based on fear of the charges brought against Ripple by the Securities and Exchange Commission (SEC), as it had initially wanted to sell over one-third of its XRP holdings.

Speaking on the decision, Craig Russo, Director of Innovation at Polyient, said:

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“With the removal of XRP from major cryptocurrency exchanges with United States users, we believe that there will be substantial capital outflows into Bitcoin and Ether. This should promote the ongoing crypto rally as well.”

Grayscale delists XRP from DLC fund

What is going on with Ripple and XRP?

In December 2020, the United States Securities and Exchange Commission disclosed an official lawsuit against Ripple Labs and two of its executives for the unauthorized sale of securities.

The SEC allergies that XRP is security; hence Ripple Labs and its officials are expected to adhere to security regulations. The announcement came as a shockwave for the company and the Ripple community, causing the cryptocurrency to lose over 50% of its market cap and fourth position to Litecoin on Monday.

Meanwhile, Ripple Labs and its executives assert that XRP is not a security, but it is a currency and a tradable asset like Bitcoin and Ether. The SEC has already clarified its stance on Bitcoin and Ether, claiming that they do not belong to the same category as Ripple. But it is yet to make an official announcement about other cryptocurrencies.

Many cryptocurrency platforms with headquarters in the US work closely with the SEC to ensure they meet all requirements (even if the native currency is not a security). However, this was not the case for Ripple, and now the company, its executives, investors, and XRP token holders are having a fair share of the consequences.

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