Grayscale Investments has removed XRP from its diversified public crypto fund — Grayscale Digital Large Cap Fund (DLC). The move could be yet another fallout from the current enforcement action by the U.S. Securities and Exchange Commission (SEC) against Ripple.
Grayscale Nixes XRP, Reallocates Liquidated Position
According to an announcement, Grayscale revealed that it removed XRP from its Digital Large Cap Fund (GDLC). Following the liquidation of the XRP holdings in the fund, the funds were used to purchase more Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) and Bitcoin Cash (BCH). Before the sale of XRP, the crypto token was about 1.46 % of the Fund.
Meanwhile, it seemed that the cause for the XRP removal resulted from an earlier announcement by Genesis Global Trading, the fund’s authorised participant. Towards the end of December, Genesis Global said that it would suspend XRP trading by Jan. 15, 2021.
While Grayscale does not mention the ongoing Ripple/SEC legal battle as a reason for its decision, the crypto asset manager joins the long list of cryptocurrency companies that have either delisted XRP or suspended trading on their platforms. Following the allegation, cryptocurrency platforms such as Binance, Coinbase, announced the suspension of XRP trading from January 2021.
Consequents Run Dire for Ripple
Back in Dec. 2020, the Commission alleged that Ripple conducted a $1.3 billion unregistered securities offering. The trial proceedings are expected to commence with a virtual pretrial conference slated for February.
Other fund managers like Bitwise have also liquidated their XRP holdings following the SEC’s lawsuit against Ripple. The negative blowback from these events has triggered a significant decline in XRP price with the token unable to post any gains during the recent altcoin resurgence.
Meanwhile, Ripple released a statement saying that it was ready to counter the SEC’s claims. The company further noted that the lawsuit hurt XRP holders with no connection to the company. Earlier in January, Ripple supporters filed a petition, asking the U.S. government to declare XRP as a currency.