TL;DR
- Grayscale has launched the XRP Trust, the first closed-end XRP trust in the U.S., targeting accredited investors interested in gaining direct exposure to Ripple’s token.
- The XRP Trust does not require SEC approval, allowing it to operate with fewer regulatory constraints, and there is already consideration of a possible future conversion into an ETF.
- Ripple has agreed to pay a $125 million fine following the classification of its XRP sales to institutional investors as investment contracts.
Grayscale has announced the launch of the XRP Trust, the first closed-end XRP trust in the United States, offering accredited investors the opportunity to gain direct exposure to Ripple’s token.
This new offering aims to provide additional returns through investment in XRP, an asset driven by the XRP Ledger (XRPL), a distributed network designed to facilitate efficient cross-border financial transactions.
Unlike exchange-traded funds (ETFs), the XRP Trust does not require approval from the Securities and Exchange Commission (SEC), allowing it to operate with fewer regulatory constraints and target a specific group of investors.
Grayscale Has Not Yet Confirmed Its Intention to Launch an XRP ETF
However, Grayscale has left open the possibility of converting this trust into an ETF in the future, provided that regulatory approval is obtained. Although the company has successfully converted its Bitcoin and Ethereum funds into ETFs, there has been no public statement confirming the intention to convert the new trust into an ETF.
Ripple to Pay a Multimillion-Dollar Fine to the SEC
The announcement comes at a crucial moment in the ongoing conflict between Ripple and the SEC, which is nearing a resolution. The court has ruled that XRP sales to retail investors do not constitute securities offerings, whereas sales to institutional investors have been classified as investment contracts. As a result of this decision, Ripple has agreed to pay a civil penalty of $125 million to settle the case with the SEC.
The Grayscale® XRP Trust will allow investors to participate in the growth of XRP without dealing with the complexities of cryptocurrency trading. The structure of the trust is designed to offer a convenient alternative for those interested in leveraging the potential of the cryptocurrency, which has been recognized for its ability to transform global financial infrastructure by facilitating fast and cost-effective international payments.
Grayscale has emphasized that the XRP Trust follows the same philosophy as its other single-asset trusts, remaining focused exclusively on XRP. While the firm aims to explore the listing of shares of new products on secondary markets, investors should be aware that there are no guarantees of success in this process, and the risks associated with investing in these products remain.
