Grayscale's XRP exchange-traded fund (GXRP) has introduced in-kind transactions and added a second custodian to manage its holdings, according to an October 5 Securities and Exchange Commission filing. The changes expand how institutional investors can create and redeem ETF shares while diversifying custody arrangements.
The direct XRP exchange option became available September 29 for authorized participants—financial firms permitted to exchange large blocks of ETF shares directly with the fund. Virtu Americas LLC and Macquarie Capital (USA) Inc. currently have agreements to support both XRP and cash transactions. Under the in-kind process, these firms deliver XRP to the fund and receive newly created ETF shares, or return ETF shares to receive XRP in exchange.
Trading Efficiency Benefits
Exchanging XRP directly for ETF shares reduces the fund's need to purchase or sell tokens on the open market, potentially lowering trading costs and narrowing the gap between share purchase and sale prices. The timing of XRP-to-ETF-share exchanges occurs one to two business days after authorized firms submit requests by 3:59:59 p.m. New York time.
Grayscale noted that limited participation in the in-kind process could impair liquidity and widen trading spreads. The fund also warned that service disruptions could interrupt processing and that its tax classification remains uncertain.
Custody Structure
Anchorage Digital Bank N.A. became eligible to serve as a custodian effective October 5, with Coinbase Custody Trust Company remaining the primary provider. Grayscale intends to allocate portions of the trust's XRP holdings between the two custodians as part of risk management.
Anchorage requires multiple key pieces to be combined to authorize asset transfers, reducing reliance on any single security element. The firm's XRP holdings and associated keys are expected to remain in cold storage—offline protection—while allowing temporary use of internet-connected wallets for settlement and expenses.
The custody agreement requires commercial crime insurance or a fidelity bond with aggregate limits of at least $100 million to protect against loss of client assets. Coverage is shared across customers and is not guaranteed to cover all losses, with contractual liability limits further restricting potential recovery.
Fund Context
Grayscale began trading GXRP on the NYSE Arca stock exchange on November 24, 2025, following a private offering for eligible investors in September 2024. As of August 31, GXRP represented 11.92% of the firm's Leaders adviser portfolio and 26.11% of its Next Gen portfolio, which excludes bitcoin.
