Institutional cryptofund manager Grayscale Investments has begun the dissolution of its XRP Trust in response to the Security and Exchange Commissions December 2020 lawsuit alleging the XRP token is a security under U.S. law. According to an announcement published Wednesday, Grayscale decided to dissolve the trust in response to the spate of XRP delistings from major cryptoasset exchanges after the SECs complaint was filed. Grayscale concluded
It is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP to U.S. dollars, and therefore continue the Trusts operations. All XRP held by the trust has already been liquidated, with Grayscale intending to distribute the net cash proceeds to XRP Trust shareholders after deducting expenses. The trust will be terminated following the distribution of said cash.
Despite the SECs hardline position on XRP, regulators in other countries are not convinced the token comprises a security. A January report on cryptocurrency regulation published by the U.K. Treasury classified XRP as an unregulated token alongside leading digital assets Bitcoin BTC and Ether ETH, with the Treasury describing unregulated tokens as neither emoney tokens nor security tokens. The report describes XRP primarily as an exchange token a token that is primarily used as a means of exchange. XRP is currently trading for 0.31 and is down 40 in the past 30 days.