Grayscale’s XRP, XLM Trust Products Bleed Value Amid Ripple Lawsuit

Amid the Ripple lawsuit, Grayscale has trimmed its XRP holdings significantly. The same can't be said for its Stellar Lumens bag.

Key Takeaways

  • Grayscale has reduced its XRP holding by ~9.18 million and its XLM holding by ~9.74 million.
  • They have reduced their XRP holding due to the ongoing SEC lawsuit against Ripple.
  • XLM holdings appear to have been reduced as a precautionary measure.

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Grayscale, the New York-based investment company, allegedly sold massive amounts of XRP and XLM tokens from their respective Trust products.

The company has, however, confirmed that this is not the case. There are no redemption procedures for these two Trust products.

Grayscale Deals XRP, XLM Blow

According to data from Bybt, the investment firm had reportedly reduced its XRP holding by 9,189,031, worth ~$2.02 million at press time. Its XLM holding also saw a drop of 9,743,886, worth ~$1.26 million at press time.

This has been identified as a reporting error from Bybt. A spokesperson from Grayscale told CoinTelegraph:

“Statements about large sales of underlying assets by any of our investment products are false and inaccurate. Any perceived large decrease in the USD value of Grayscale XRP Trust would have been a result of a decrease in the USD price of XRP.”

At present, Grayscale investment holds 26.46 million XRP in its XRP Trust, amounting to ~$5.82 million. Its Stellar Lumens Trust holds 9.19 million XLM, worth roughly ~$1.19 million.

Ripple Inc. is being sued by the SEC for selling XRP tokens. The SEC has charged Ripple and its executives for selling 14.6 billion XRP ($1.38 billion). 

The pre-trial will begin on Feb. 22. Meanwhile, Ripple has stated that they will continue to operate in the United States despite the lawsuit. Since then, exchanges like Coinbase, Bitstamp, Binance.US, and more have halted XRP trading. Thus, it makes sense for Grayscale to reduce its XRP holdings.

While Stellar is under no such regulatory scrutiny, Grayscale seems to have pre-emptively taken precautionary measures, as Stellar was co-founded by Jed McCaleb, who was also the founder of Ripple before leaving the company in July 2013.

Besides XLM and XRP, the firm gives investors the ability to invest in Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic, Zcash, XRP, and Horizen. Grayscale also offers a diversified market-cap-weighted fund called Grayscale Digital Large Cap Fund (GDLC). This fund comprises Bitcoin, Ethereum, XRP, Bitcoin Cash, and Litecoin.

Grayscale has $20.14 billion in assets under management (AUM), with its Grayscale Bitcoin Trust (GBTC) amounting to $17.61 billion, thus constituting 87% of its total AUM.

Editor’s Note: This article has been updated on Jan. 1, 2021, at 12:00 pm UTC to reflect that Grayscale did not sell its XRP and XLM holdings. Instead, the value of these holdings simply decreased. 

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