Crypto asset manager Grayscale announced today that it has removed XRP from its digital large-cap fund, in the wake of US Securities and Exchange Commission accusing Ripple and co-founder Chris Larsen and CEO Brad Garlinghouse of allegedly raising over $1.3 billion through an unregistered “securities offering.”
The firm stated that it had sold all XRP from the fund and bought more of bitcoin (BTC), ether (ETH), litecoin (LTC), and bitcoin cash (BCH). XRP was approximately 1.46% of the fund. The revised composition of the digital fund is BTC (81.63%), ETH (15.9%), LTC (1.43%), and BCH (1.1%).
Likewise, Bitwise announced that its Crypto Index Fund liquidated its position in XRP. It reasoned that the fund “does not invest in assets that are reasonably likely to be deemed securities” under federal securities laws.
The federal agency claimed that XRP was security, with Stephanie Avakian, the director of SEC Enforcement Division, stating that:
Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.
However, Japanese financial services company SBI Holdings published an official statement with regard to SEC proceedings against Ripple. The group said that under Japanese law, XRP is dubbed as a “cryptocurrency asset.” SBI also quoted a researcher and announced that XRP will continue to trade on Japanese crypto exchanges as “cryptocurrency assets” rather than “securities.