Bitwise Asset Management’s Bitwise 10 Crypto Index Fund (BITW) has liquidated its position in XRP, one of the largest cryptocurrencies by market cap, after the U.S. Securities and Exchange Commission (SEC) sued Ripple, the largest XRP holder, over the token’s ‘ongoing’ sale from the firm.

In a press release, Bitwise revealed its decision to liquidated its position in XRP was based “on  consideration of new public information from the SEC’s complaint.” Before the sale, XRP was approximately 3.8% of the fund, the press release notes. The proceeds from the sale were reinvested in other portfolio assets.

It reads:

The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws.

The Bitwise 10 Crypto Index Fund was launched in 2017 and “employs a research-driven investment approach that seeks to provide market-cap-weighted exposure to the 10 largest cryptoassets, accounting for approximately 80% of the cryptomarket.” It is rebalanced monthly and investors can trade it via their brokerage accounts.

As reported, several cryptocurrency exchanges including OSL, Beaxy, and CrossTower have temporarily stopped trading XRP after the SEC sued Ripple.

The SEC’s lawsuit against Ripple alleges the firm paid cryptocurrency exchanges to permit “the buying and selling of XRP” on their platforms. Per The Wall Street Journal, at the heart of the lawsuit is whether XRP is a security that should have been registered with the regulator or not.

As Ripple did not register XRP as a securities offering, the regulator argues investors did not have adequate information, and as such the defendants had an unfair advantage.

XRP, the agency said, has existed almost wholly as a speculative asset and not a currency, with it being marketed and sold as a speculative asset. The regulator wants the defendants to pay back some of their gains and financial penalties, and to prohibit them from selling cryptoasset securities

As reported, the price of XRP has plunged from about $0.49 earlier today to about $0.31, as trading platforms halted trading of the token. While users can still withdraw, the SEC’s lawsuit has seen exchanges tread carefully in a bid to avoid related lawsuits.

Featured image via Pixabay.