Grayscale Investments has initiated the dissolution of its XRP Trust, citing the lawsuit against Ripple (XRP) by the United States Securities and Exchange Commission (SEC)
Grayscale Investments announced that it has started the dissolution of its Grayscale XRP Trust, citing the SEC’s lawsuit against Ripple as the significant reason. This latest development came after Grayscale removed XRP from its large-cap crypto fund earlier this month.
XRP has been facing a torrid time in recent weeks following the SEC’s lawsuit against Ripple. Grayscale added that cash proceeds from the Trust’s liquidated XRP would be distributed amongst the shareholders. However, the asset manager didn’t reveal how much the proceeds would amount to in monetary terms.
However, according to the firm’s 8 January SEC filing, Grayscale raised $19.2 million from 70 investors over the past three years. With XRP price declining by nearly 50% in recent weeks, it is unclear how much the fund is worth at the time of liquidation.
Grayscale cited SEC’s December suit against Ripple Labs as the major reason behind its decision to liquidate its XRP trust. Ripple Labs raised more than $1.3 billion via token sales since the cryptocurrency was launched in 2013. Since the lawsuit, XRP has been experiencing a torrid time as numerous cryptocurrency exchanges delist it from their platforms.
The cryptocurrency asset manager stated that it would become harder for the US investors, including the Grayscale Trust, to convert XRP into the US Dollar. Hence, making it harder to continue the XRP Trust operations.
Bakkt doesn’t intend to support XRP
The bad news surrounding XRP continues as the Bakkt CEO mentioned that the company doesn’t intend to support XRP due to Ripple’s ongoing legal challenges. Gavin Michael said this during a podcast interview, where he also discussed the mainstream adoption of Bitcoin and other cryptocurrencies.
Michael stated, “We entered the crypto space through Bitcoin, and that was our first currency we’ve made available. We have others that are scheduled to come on board as part of the product development. But XRP is not available”.
This interview came a few hours after Bakkt announced a merger deal with VPC Impact Acquisition Holdings. The merger would allow Bakkt to go public and list on stock markets.