Management company Grayscale Investments announced that it has dissolved XRP Trust and the cash proceeds from the liquidation will be distributed among the Trust shareholders after deduction of relevant expenses. The asset management company said that the recent decision by the SEC is the main reason behind the termination of XRP Trust. The cryptocurrency fell slightly following the news but remained above $0.29.
According to the official announcement, Grayscale decided that the conversion of XRP into US dollars will become hard in the future due to regulatory uncertainty regarding the status of XRP. Moreover, the firm outlined the recent delisting announcements of the world’s fourth-largest cryptocurrency by leading exchanges.
“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,” Grayscale said in the official announcement.
The firm’s total asset under management (AUM) currently stands at around $26 billion. Grayscale announced earlier this month that its total AUM hit $28.5 billion, following a significant rally in Bitcoin and other cryptocurrency assets. The digital asset management firm now has more than 608,000 BTC valued at more than $22 billion. Ethereum is the second-largest holding of Grayscale as the company has more than 2.9 million ETH with a value of $3.25 billion.
At the time of writing, XRP is trading at $0.29, the cryptocurrency lost more than 60% of its value in December due to the SEC’s lawsuit. The price of XRP hit a high of $0.35 earlier this month.