Cryptocurrency manager Bitwise liquidated XRP from its Crypto Index Fund worth $ 9,3 million. The company moved shortly after the United States Securities and Exchange Commission (SEC) filed a lawsuit against the company that allegedly created the token, Ripple Labs Inc., for conducting an unregistered stock sale.
The ground around Ripple is moving
"Prior to the liquidation of the asset on December 22, 2020, XRP was covering approximately 3,8% of the index," the company wrote. “The Fund liquidated its position and reinvested the proceeds in other assets”. The Bitwise 10 Crypto Index Fund primarily holds bitcoin (quotation BTC) and ether (ETH).
The capital of the liquidated XRP position was reinvested in the fund's other assets, according to a company press release. The index also holds litecoin (LTC), bitcoin cash (BCH), ADA, LINK, EOS, XLM and tezos (XTZ).
“The Bitwise 10 Crypto Index Fund does not invest in assets that could reasonably be considered securities under federal or state securities laws,” the company wrote. "Bitwise's decision to liquidate its position in XRP is based on an examination of new public information that has emerged from the SEC complaint."
While there is no link to the Bitwise 100 Total Market Crypto Index, which is maintained for academic and research purposes, XRP will also be removed from that index, said Matt Hougan, Bitwise's chief investment officer. The Bitwise 100 combines the holdings of the Bitwise 70 Small Cap Crypto Index, Bitwise 20 Mid Cap Crypto Index and Bitwise 10 Large Cap Crypto Index, he explained.
Some institutions continue to support the company
While Bitwise reacted quickly by changing its plans, leading Japanese financial group SBI Holdings is of the opinion that the SEC lawsuit has not yet impacted its partnership with Ripple.
"As far as we know, the lawsuit is currently pending and no injunction has been issued against Ripple for the sale of XRP or on-demand liquidity and other products, and the company is running as usual and moving forward with the expansion of RippleNet, ”a spokesperson for the company said in a statement.
Under these circumstances, SBI Holdings will continue to be a strong partner of Ripple as we work together to expand our business in Asia. Ripple's On-Demand Liquidity (ODL) service allows businesses to transfer funds from one currency to XRP and from XRP to another currency.
The cross-border payment tool allows businesses to avoid opening bank accounts in the countries they want to send funds to. Earlier this year, Ripple and SBI announced that Ripple intended to invest in MoneyTap, a blockchain money transfer app launched through a joint venture between SBI and Ripple called Ripple Asia.
In January of this year, SBI announced that it would give shareholders the option to receive XRP as a benefit. Financial institutions known to be connected to Ripple's suite of services have not commented on the matter.
