Jupiter Asset Management’s internal compliance team has withdrawn its investment in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory issues in Ireland. The company initially invested over $2 million in the fund and experienced a loss of $834.
According to a recent report from the Financial Times, Jupiter invested $2,571,504 in the 21Shares Ripple XRP ETP (AXRP) in the first half of 2023. However, the exact date of the initial investment was not specified. The ETP had a one-year return of 31.7%, but it has declined by 13.2% in the past six months.
The AXRP tracks the performance of XRP (XRP) and was launched in March 2019. According to the 21Shares website, the ETP has assets under management totaling $50,497,518.
The report explained that asset managers operating under Ireland’s Undertakings for Collective Investment in Transferable Securities Directive (UCITS) are not allowed to have exposure to cryptocurrency. After Jupiter’s compliance team discovered the trade in one of its Irish UCIT funds, the company sold off the investment. Jupiter liquidated its Ripple XRP ETP holding for $2,570,670, resulting in a loss of $834.
This decision comes at a time when there is ongoing discussion about the potential approval of an XRP exchange-traded fund (ETF), especially after the recent approval of 11 spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC). However, due to the legal dispute between Ripple and the SEC regarding whether XRP qualifies as a security, some analysts speculate that it may be unlikely.
In a previous report, CoinShares’ head of product, Townsend Lansing, stated that an XRP ETF would not be feasible unless the SEC is forced to acknowledge or agree that XRP is not a security. Meanwhile, Brad Garlinghouse, CEO of Ripple, believes that the recent approval of several spot Bitcoin ETFs in the United States will pave the way for more crypto ETFs in 2024. However, he did not explicitly predict the approval of an XRP ETF by the SEC, but he expects an Ethereum ETF to be approved in the near future.
In other news, Crypto Banter’s Ran Neuner described Ripple as “despicable” and praised ZachXBT in the “Hall of Flame.”