Media: Grayscale is preparing to announce the launch of an XRP-based closed-end trust

What’s new? Crypto investment company Grayscale is set to announce the launch of a trust based on the $35,4 billion XRP token capitalized by fintech company Ripple, FOX reporters reported. According to them, the announcement will be released on September 12. The new closed-end trust will offer accredited investors direct access to the XRP Ledger blockchain-based cryptocurrency, through which Ripple conducts cross-border transactions.

Material by FOX

What else is known? According to journalists, Grayscale intends to launch exactly a trust, and not an exchange-traded fund (ETF). For instance, ETFs must be approved by the US Securities and Exchange Commission (SEC) because they are designed for retail investors, while trusts are aimed at accredited investors and are more leniently regulated.

However, a trust can be converted into an ETF upon receiving the necessary regulatory approvals. Earlier this year, Grayscale already converted its bitcoin and Ethereum-based trusts into spot exchange-traded funds; they trade on the NYSE under the tickers GBTC and ETHE, respectively.

That said, both products faced outflows as they previously offered no redemption options for an extended period of time and, upon conversion, set the highest management fees in the crypto ETF industry.

GBTC has now seen outflows of over $20 billion, but it still has $12,81 billion in assets under management. In turn, ETHE has seen $2,69 billion in outflows but has $4,1 billion in ETH under management.

In addition to its existing products, Grayscale has launched mini-funds under the tickers BTC and ETH on the same NYSE, these products are seeing inflows of $375 million and $258 million respectively as they offer the lowest management fees in the industry.

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Spot bitcoin ETFs were launched in the US on January 11, while ETH funds were admitted to the market on July 23. All this time, XRP holders have been waiting for a major asset management company such as BlackRock or Grayscale to launch a similar product based on their token.

The launch of such a product has been complicated by proceedings over the status of the asset. Back in 2020, the SEC sued Ripple for selling XRP as unregistered securities, which raised $1,3 billion from investors.

Last year, Ripple won a partial victory, as the court found that retail sales were not an infringement. As for the sales to institutional investors, for it, the SEC required the company to pay a $2 billion fine, which was later reduced by the court to $125 million. The SEC is expected to appeal the court’s ruling on secondary market sales of XRP by October.

Nevertheless, Grayscale believes that XRP will bring value to investors in the long term. The senior executive noted that the Grayscale XRP Trust will give “investors with exposure to a blockchain solution that is potentially positioned to play a crucial role in optimizing legacy financial systems by streamlining cross-border payments.”

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XRP ranks seventh in the overall cryptocurrency capitalization ranking and is trading at $0,5594, having added 5,5% overnight. The weekly increase was 1,5%, but the value is down by 9,6% since the beginning of the year.