Bitwise Excludes XRP from Its Bitwise 10 Crypto Index Fund

Bitwise Asset Management said that it was excluding XRP from its flagship index fund, Bitwise 10 Crypto Index Fund.

The decision was taken in light of the lawsuit the U.S. Securities and Exchange Commission (SEC) filed against Ripple.

“Bitwise 10 Crypto Index Fund does not invest in assets that are, to a certain degree of probability, considered securities under federal law. The decision to liquidate the XRP position was based on new information that became known as a result of the SEC lawsuit,” the company said.

Prior to the sale on December 22, XRP accounted for about 3.8% of the fund. The proceeds were invested by Bitwise in other assets represented in the portfolio.

In early December Bitwise Asset Management conducted the listing of Bitwise 10 Crypto on the OTCQX over-the-counter market. Before that day, the index was 75% Bitcoin and 13% Ethereum. The remaining 12% were allocated among XRP, Litecoin, Chainlink, Tezos and several other cryptocurrencies.

“The premium of the Bitwise crypto fund’s shares relative to cryptocurrencies reached 660%”

In its lawsuit, the SEC contends that Ripple, over seven years, sold unregistered securities in the form of XRP tokens to retail investors and attracted $1.3 billion in that time. The defendants also include CEO Brad Garlinghouse and co-founder Chris Larsen, whom the agency calls “major holders of the security.” According to the filing, the two together sold $600 million worth of tokens.

Brad Garlinghouse criticised the SEC’s decision, describing the actions of the U.S. regulator as “a terrible precedent for the entire industry and any company dealing with digital assets.” In his words, Ripple has always worked in partnership with regulators and has stressed that the United States lacks a clear regulatory framework for the cryptocurrency industry.

After news of the Ripple lawsuit became known, XRP trading on regulated venues OSL Digital, CrossTower and Beaxy Exchange was halted.

Additionally, the decentralized derivatives platform Synthetix warned users that they cannot yet purchase iXRP tokens.

It will need to be redeployed with new limits by the protocolDAO, we will announce when this is done.

— Synthetix ⚔️ (@synthetix_io) December 23, 2020

“iXRP has hit the cap and has been frozen. It will need to be relaunched with new limits via the protocolDAO. We will announce when this happens,” Synthetix said.

Over the past 24 hours, XRP’s price has fallen by about 35%. At the time of writing the token was trading around $0.31.

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