Ripple and XRP are continuing to lose the love they once boasted thanks to the recent lawsuit initiated by the Securities and Exchange Commission (SEC).Ripple Is Losing Out AgainThe financial firm recently filed charges against Ripple on account that the XRP asset it hosts is alleged to be a security rather than a currency by agency heads. Thus, according to the organization, Ripple has not been forthcoming regarding the coin’s status and engaged in an illegal token sale when XRP was first offered by not properly registering it. It is estimated that the company sold over billion units during that time.Ripple has fought these allegations, claiming that XRP is a standard currency and that it has been recognized as so by several leading financial organizations in both the United States and
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Ripple and XRP are continuing to lose the love they once boasted thanks to the recent lawsuit initiated by the Securities and Exchange Commission (SEC).
Ripple Is Losing Out Again
The financial firm recently filed charges against Ripple on account that the XRP asset it hosts is alleged to be a security rather than a currency by agency heads. Thus, according to the organization, Ripple has not been forthcoming regarding the coin’s status and engaged in an illegal token sale when XRP was first offered by not properly registering it. It is estimated that the company sold over $1 billion units during that time.
Ripple has fought these allegations, claiming that XRP is a standard currency and that it has been recognized as so by several leading financial organizations in both the United States and abroad. Nevertheless, it appears that the lawsuit is moving forward for the time being, and several companies want nothing to do with the asset while things remain in speculation.
One of the latest companies cutting ties with Ripple and XRP is Grayscale, which has announced that it will no longer be offering its XRP Trust to customers. The company explained in a statement that converting USD to XRP and vice versa is likely to be difficult to do in the long run given that the currency is still being subjected to so many regulatory investigations.
In addition, Grayscale is not comfortable with the high number of exchanges that have delisted the asset, and thus does not want to take the chance of potentially offering something that has no value or might be deemed illegal in some way. Following the announcement, XRP dropped to about $0.29 per unit, roughly six cents less than its recent high of $0.35.
In the statement, Grayscale mentions:
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.
How Much Money Does Grayscale Manage?
Since the SEC first brought the lawsuit to light, XRP has lost as much as 60 percent of the value it held in December of 2020. Meanwhile, Grayscale’s total assets amount to well over $20 billion, and its total AUM initially surpassed $28 billion in early January.
Aside from the XRP Trust, Grayscale also provided trusts based in bitcoin and Ethereum, which presently hold as much as $22 billion and $3.25 bitcoin in their respective assets.