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Bitwise delists XRP

Photo of: Joseph Stone
by Joseph Stone

Another hard blow for Ripple and his XRP token. One of the leading crypto fund managers is totally liquidating its investments in this cryptocurrency. Exchanges and trading desks like Galaxy Digital also ban XRP.

Is XRP a security, a currency or a means of exchange? Ripple and the SEC are head-on opposing each other on this issue. The courts have yet to rule on the status of the now fourth largest cryptocurrency. Bitwise will not wait for the end of the dispute, however.

Bitwise Asset Management, no less than one of the largest crypto fund managers, is indeed taking a radical and immediate stance on XRP. No more holding XRP tokens.

In a press release, Bitwise 10 Crypto Index Fund announces that it has liquidated its position in XRP. And the explanation is simple: the SEC lawsuit and the security status attributed to the token. For the fund, the legal risk is very real.

Bitwise “does not invest in assets that could reasonably be considered securities,” the company justified. On December 22, prior to the sale, XRP represented approximately 3.8% of the Fund’s assets.

The proceeds from the sale of these tokens go to Bitwise’s portfolios in other cryptocurrencies. The asset manager does not specify which tokens benefit from the liquidation of its XRP position.

For Ripple, this is yet another blow. With over $100 million in assets under management in October, Bitwise is one of the leading crypto funds in the market. But more importantly, this decision could well be an oil stain.

This is probably already the case. According to The Block, two crypto investment companies, Galaxy Digital and Jump Trading, are severing all ties with XRP. And once again, the trading desks justify this decision by the SEC’s action.

Decrypt also points out that three crypto exchanges have also removed XRP tokens from their trading platforms. These are CrossTower, Beaxy, and OSL. Others may follow.

By keeping the XRP, qualified as a security, the exchanges should obtain a license from the SEC. Failure to do so could expose them to prosecution and financial penalties.

“I think that any crypto exchange that doesn’t deliberately not delist XRP this week loses its mind. If the SEC says it’s a security, you’d be crazy to list it without a license,” said Bruce Fenton, CEO of Chainstone Labs.

As far as the XRP course is concerned, it’s already sinking. It’s been in steep decline for four consecutive days. Yesterday, according to CoinMarketCap, it dropped more than 30%. In addition, the token is losing its position as the 3rd largest cryptocurrency, a significant status for the founders of Ripple.