The tribulations for Ripple’s token XRP do not seem to fade away anytime soon. The SEC Lawsuit has created a rough situation for the crypto token when most of the crypto industry names have started to disassociate themselves from Ripple.
Now Grayscale has announced that it is dissolving the Grayscale XRP Trust.
Grayscale To Terminate Its XRP Trust
Grayscale issued a press release in which it said that the dissolution of the Grayscale XRP Trust is done following the “Securities and Exchange Commission’s December 22, 2020 decision to file a federal court action against certain third parties asserting that XRP is a “security” under federal securities law.
The asset management firm Grayscale sold off all the XRP it had accumulated in its Digital Large Cap Fund last week, and now responding to the developments amid SEC lawsuit against Ripple, Grayscale has announced the termination of the XRP trust. The announcement made by the firm elucidates that due to the SEC Lawsuit, the US investors are going to face difficulty in converting their XRP tokens to USD, which in turn will create conversion and incentivizing issues.
Thus, the firm decided to discontinue the Trust as it will be difficult to operate amid such restrictions. Grayscale thus said that it would be liquidating the Trust and share the proceeds from the liquidation to the shareholders. Grayscale noted, “The Trust will terminate following distribution of the net cash proceeds: Currently, Ripple Inc is facing suspension from multiple exchanges including highly popular Coinbase, Kraken, and BitFinex. The United States Securities and Exchange Commission decided to file a lawsuit against Ripple and two of its most crucial executives, Brad Garlinghouse, to sell unregistered securities in the US. Post the SEC Lawsuit, major exchanges and platforms started delisting XRP.
Grayscale also initiated to withdraw its XRP Trust considering the future difficulties for XRP in the US. The Grayscale XRP Trust enabled investors to XRP without holding shares directly. Grayscale also has Bitcoin and Ethereum Trust through which it allows high-value investors to invest in Ethereum and Bitcoin.
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