Bitwise Pulls XRP from Its Crypto Fund Amid SEC Probe ByJimmy AkiPRO INVESTOR Updated: 29 July 2021 Ripple Labs’ troubles have compounded following the probe from the U.S Securities and Exchange Commission (SEC). With the industry watching closely to see the case’s outcome, some firms have preemptively cut ties with the company and its token, XRP. Bitwise Cuts Bait This week, Bitwise Asset Management, one of the crypto industry’s top asset management firms, announced that it had liquidated all shares of its Bitwise 10 Crypto Index Fund. In a press release, the investment firm explained that it had divested itself of its XRP holdings, in line with its policy of not investing in assets that could be deemed securities under federal laws. Bitwise launched its crypto fund in 2017 to improve digital asset exposure for institutional investors. It is unclear what percentage of the fund is in XRP, but that has now been liquidated entirely. The news is following allegations from the SEC that Ripple Labs had engaged in an unregistered securities offering for its XRP token. In a case unveiled on Tuesday, the agency alleged that XRP should be classified a security, adding that Ripple’s $1.3 billion capital raise from the asset had been illegal. The SEC further alleged that Ripple had distributed the token for “labor and market-making services. It also named Brad Garlinghouse and Chris Larsen – Ripple’s CEO and co-founder, respectively – in the suit, claiming that they failed to register XRP sales totaling about $600 million. Stephanie Avakian, the director of the SEC’s Enforcement Division, said in part: “[These actions] deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.” If successful, the SEC’s suit will effectively classify XRP as security and place it under securities regulations going forward. Ripple Labs, as well as Larsen and Garlinghouse, could also face disgorgement and civil penalties. Ripple is On Its Own Garlinghouse and Ripple have claimed publicly that they will fight the suit. The company recently published a Wells submission, claiming that the SEC is looking to cherry-pick XRP and label it a security. It added that by coming after XRP and not assets like Bitcoin and Ether, the agency was launching an attack on innovation and customer-friendly operations in the United States. Still, several industry firms have decided to abandon the company and pull support for XRP. This week, three exchanges – Hong Kong-based OSL, Chicago-based Beaxy, and New York-based CrossTower – all announced that they would delist XRP from their platforms and stop all activities related to the asset. Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice.https://t.co/EXJJEHMawn — OSL (@osldotcom) December 23, 2020 Hailey Lennon, a partner at New York-based law firm Anderson Kill, also explained that more exchanges could make similar moves. As she said, an eventual win for the SEC will affect exchanges that have already listed the asset. So, many of them will most likely take it off in the interim.