Jupiter Asset Management's compliance division recently canceled 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 minor loss of $834. This decision was made as asset managers operating under Ireland’s Undertakings for Collective Investment in Transferable Securities Directive (UCITS) are restricted from exposure to cryptocurrencies. The compliance team at Jupiter detected the trade in one of its Irish UCIT funds and subsequently sold off the investment, liquidating its Ripple XRP ETP holding for $2,570,670.
The 21Shares Ripple XRP ETP (AXRP) had been performing well, yielding a one-year return of 31.7%, but it declined by 13.2% in the past six months. Despite this, the ETP has assets under management (AUM) totaling $50,497,518. The cancellation of Jupiter's investment comes at a time when there is ongoing discussion about the potential approval of an XRP exchange-traded fund (ETF), particularly following the recent approval of 11 spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC).
However, the approval of an XRP ETF remains uncertain 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 unless the SEC is forced to or agrees to concede that XRP is not a security. Ripple's CEO, Brad Garlinghouse, expressed optimism about the future of crypto ETFs following the approval of Bitcoin ETFs but did not explicitly predict the approval of an XRP ETF. He expects an Ethereum ETF to be approved in the near future, indicating a potential opening for more crypto ETFs in 2024.
Celsius, a bankrupt cryptocurrency lender, has successfully distributed $2 billion worth of crypto to 172,000 creditors, including 20,500 Bitcoin and 301,000 Ether tokens. This distribution, managed by payment giant PayPal and crypto exchange Coinbase, was executed smoothly without any security or operational issues. However, account holders who did not agree to the restructuring plan will not receive their distribution until their individual claims are resolved.
While nearly 75% of the distributed BTC and ETH has already been collected by creditors through PayPal/Venmo and Coinbase, some account holders may face challenges in receiving their distribution due to potential Anti-Money Laundering (AML) or compliance issues flagged by Coinbase or PayPal. The distribution agents have the discretion to refuse distributions to anyone who does not meet their compliance requirements.
Celsius had filed for bankruptcy in July 2022 but recently announced its exit from bankruptcy proceedings. The distribution of assets was a part of its restructuring plan, which aimed to repay creditors before the end of 2023. However, the former CEO of Celsius, Alex Mashinsky, is scheduled for trial in September 2024 regarding Celsius' collapse, with his legal team facing scrutiny for potentially representing conflicting interests in other crypto-related cases.
Arkham Intelligence, a blockchain analytics platform, has identified that approximately 107,000 BTC of MicroStrategy’s holdings are pooled with Fidelity Custody, while another 79,000 BTC is held in segregated custody, including Coinbase Prime. This accounts for about 98% of MicroStrategy’s on-chain holdings, totaling roughly 186,000 Bitcoin out of the firm’s total 190,000 BTC in wallets.
The identification of MicroStrategy’s Bitcoin holdings was part of Arkham Intelligence’s effort to deanonymize the blockchain. The platform added MicroStrategy to its publicly available cryptocurrency wallet database, revealing the details of the company's holdings. It was noted that the remaining 4,000 BTC controlled by MicroStrategy were not accounted for in the identified wallets.
MicroStrategy, under the leadership of Executive Chair Michael Saylor, has been actively acquiring Bitcoin since August 2020, aiming to adopt BTC as a reserve asset. The recent acquisition of 850 BTC in January brought the company's total Bitcoin holdings to 190,000. Arkham Intelligence's identification of the locations of these holdings provides a clearer picture of how MicroStrategy manages its significant Bitcoin holdings.
