Jupiter compelled to liquidate $2 million Ripple XRP investment due to regulatory obstacles
Jupiter, a well-known investment firm, has made headlines recently for withdrawing its investment in the 21Shares Ripple XRP exchange traded product (ETP). The decision was made due to regulatory concerns in Ireland, which were flagged by the firm’s compliance division and led to the cancellation of the investment.
Jupiter had initially invested over $2 million in the Ripple XRP ETP. However, regulatory restrictions under Ireland’s undertakings for collective investment in Transferable Securities Directive (UCITS) required the investment to be terminated. Jupiter’s compliance team identified the trade within one of its Irish UCIT funds and subsequently sold off the investment, resulting in a minor loss of $834.
The Ripple XRP ETP, which tracks the performance of XRP, had shown promising returns over the past year with a 31.7% increase. However, it experienced a decline of 13.2% in the past six months. Despite its initial success, regulatory constraints led to Jupiter’s decision to liquidate its holding in the ETP.
This move by Jupiter comes amidst ongoing discussions regarding the potential approval of an XRP exchange traded fund (ETF). While the recent approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC) has raised hopes for further crypto ETF approvals, the legal dispute between Ripple and the SEC regarding XRP’s classification as a security remains a significant obstacle.
Brad Garlinghouse, the current CEO of Ripple, remains optimistic about the future of crypto ETFs. Nevertheless, he anticipates that the approval of an Ethereum ETF may be on the horizon soon.
Jupiter Asset Management’s compliance division’s decision to revoke its investment in the Ripple XRP ETP highlights the ongoing challenges faced by investors navigating the regulatory landscape of the cryptocurrency market. Despite the setback, discussions regarding the potential approval of XRP ETFs continue to evolve and will collectively shape the future of digital asset investment.