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Grayscale Dissolves XRP Trust Amid SEC-Ripple Lawsuit



Grayscale Dissolves XRP Trust Amid SEC-Ripple Lawsuit


The SEC lawsuit against Ripple’s XRP continues to send Ripple down the ruins. Recently, leading digital asset manager, Grayscale, has entirely dissolved its XRP trust. This comes after the company announced that it has removed Ripple from its diversified public crypto fund.

According to the official communique, the move is in line with the current SEC lawsuit against Ripple, which among other things, classifies the fourth-ranked cryptocurrency as a security token.

An excerpt from the press statement reads:

“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.”

Part of the dissolution process means that Grayscale has liquidated the XRP trust and plans to distribute the funds they get among the shareholders of the XRP Trust product. 

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According to data, the XRP Trust holds about $8.4 million. Ripple is also the company’s worst-performing asset since its inception. Grayscale nixed the popular altcoin from its diversified public crypto fund. Unlike the XRP Trust announcement, Grayscale did not cite the SEC lawsuit against Ripple as the reason for removing the token from its Digital Large Cap (DLC) fund earlier in January.

Ripple (XRP) Keeps Going Down the Drain

Since the Securities Exchange Commission issued the lawsuit against Ripple, several US-based exchanges have delisted the token from their trading catalogues. The case between SEC and Ripple is expected to start with a virtual pretrial conference slated for February. 

Japan FSA Disagrees with SEC

The Japanese Financial Services Authority (FSA) said that it does not classify the token as a security. According to the FSA, the token does not fulfil all the requirements of a security asset under the country’s law. 

Indeed, Ripple is a popular crypto-asset in Japan, with SBI Holdings, one of the largest financial services firms in the country, being a known advocate of the cryptocurrency.

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