Jupiter Asset Management’s compliance team has revoked its investment in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory issues in Ireland. The firm initially invested over $2 million into the fund, incurring a loss of $834.
According to reports, Jupiter invested $2,571,504 into the 21Shares Ripple XRP ETP during the first half of 2023. However, the investment violated regulations under Ireland’s Undertakings for Collective Investment in Transferable Securities Directive (UCITS), which restricts exposure to crypto assets.
Upon detecting the trade in one of its Irish UCIT funds, Jupiter liquidated its Ripple XRP ETP holding for $2,570,670, resulting in a loss of $834. The compliance team identified the trade during regular oversight processes and promptly canceled it.
The revocation of Jupiter’s investment comes amid ongoing regulatory uncertainty surrounding XRP. While there is discussion about the potential approval of an XRP exchange-traded fund (ETF), legal disputes between Ripple and the SEC regarding XRP’s classification as a security may pose challenges.
Brad Garlinghouse, CEO of Ripple, believes that the recent approval of spot Bitcoin ETFs in the United States could pave the way for more crypto ETFs in 2024. However, uncertainty remains regarding the approval of an XRP ETF, with some analysts suggesting it may be unlikely unless there is clarity on XRP’s regulatory status.
Jupiter Asset Management’s decision to liquidate its Ripple XRP investment underscores the regulatory challenges faced by asset managers in navigating the crypto space. The incident highlights the importance of compliance with regulatory requirements and the potential impact of regulatory uncertainty on crypto investments.
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