Saturday, January 23, 2021

Grayscale to Dissolve XRP Trust Due To Market Reaction to SEC Lawsuit

Grayscale Investments, the world’s largest crypto manager, has announced its intention to dissolve the XRP Trust, citing the market reaction to the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple on 22nd December 2020.

This move comes a few days after the firm announced the liquidation of XRP positions from its Digital Large Cap Fund.

The new development was brought to the notice of the public via a press statement circulated on Wednesday 13th January 2021.

Read Also: Stern XRP Investor Moved a Huge Part of His XRP Holdings into Cardano (ADA)

The press statement by Grayscale reads in part as follows:

“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…

“In connection with the dissolution, the Sponsor has liquidated the Trust’s XRP and intends to distribute the net cash proceeds to Trust shareholders, after deducting expenses and providing appropriate reserves and subject to any applicable withholding. The Trust will terminate following distribution of the net cash proceeds.”

CoinGate Suspends XRP Trading

A cryptocurrency exchange based in Lithuania, CoinGate, has also joined a number of other exchanges to suspend trading of the digital token of the embattled cross-border payment firm, XRP. The suspension will be effective from 15th January 2021.

Read Also: United Kingdom Provides Regulatory Clarity for Digital Asset, Says XRP Is Not A Security

According to the exchange in a series of tweets, the decision was a result of a loss of ability “to exchange XRP for merchants that want payouts in fiat currency.”

Top Securities Watchdog in Japan Says XRP Is Not a Security

In a report credited to The Block, the top securities watchdog in Japan does not consider XRP to be a security, contrary to the stance of its United States counterpart.

According to the Financial Services Agency, XRP does not meet the definition of a security under Japanese law.

Read Also: Prominent Crypto Lawyer States What Ripple Must Do Now For XRP to Survive

Although the opinion of FSA does not hold water among the U.S. regulators, it highlights the lack of consensus on the status of XRP among securities regulators.

Prior to this clarity, SBI Holdings, a Japanese financial company, had asserted that XRP is a crypto-asset under Japanese law. And it’s worth noting that SBI is a Ripple’s partner and strong supporter.


Follow us on Twitter, Facebook, Telegram, and Download Our Android App.

Tobi Loba
Tobi-Loba is a creative and an award-winning writer with over 5 million readers from all over the world. She has B.A in English and Literature from a reputable University and currently studying for her M.A in the same field. She recently became a contributor at Herald Sheets in order to satisfy her thirst in reporting crypto and blockchain occurrences, the interest she built over the years.

Related Articles

Latest Articles