Grayscale is Dissolving its XRP Trust


Grayscale has begun the dissolution of XRP Trust with regards to the Security and Exchange Commission’s December 2020 lawsuit asserting the XRP token is a security under U.S. law.

The decision to dissolve the XRP trust was taken with regards to the spate of XRP delistings from top cryptocurrency exchanges after the SEC filed the complaint. Grayscale concluded by saying, 

“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 Trust’s operations.”

All the XRP held by the trust is already liquidated, with Grayscale intending to distribute the net cash proceeds to the XRP Trust shareholders after deducting the expenses. Once the said cash is distributed, the trust will be terminated. 

Despite SEC’s complaint on XRP, regulators in other countries are in no doubt about the security of the token. In a January report published by the U.K. Treasury, XRP is classified as an “unregulated token” along with digital assets like Bitcoin and Ether. The treasury describes the tokens as “neither e-money tokens nor security tokens.”

As per the report, XRP is an “exchange token” – a token that is “primarily used as a means of exchange.” Japan’s Financial Services Agency on Monday told The Block that it considers XRP as a cryptocurrency and not a security. At the time of writing, XRP is trading at a price of $0.2992.

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