21Shares has removed XRP from two crypto exchange-traded products (ETPs) after the Securities and Exchange Commission filed a lawsuit against XRP’s creator Ripple for illegally marketing the cryptocurrency to retail investors.

The two ETPs are 21Shares’ flagship 21Shares Crypto Basket ETP (HODL) and the 21Shares Bitwise Select 10 ETP (KEYS).

The decision came after XRP was deleted from the respective underlying indices, the 21Shares Crypto Basket index, which is administered by MV Index Solutions GmbH, and the Bitwise Select 10 Large Cap Crypto index.

With regards to HODL, 21Shares has reinvested the XRP proceeds in bitcoin and ethereum which now have an increased weighting in the ETP.

Hany Rashwan, CEO of 21Shares, commented: “As part of our quick intervention, the board was able to remove XRP using its broad network of liquidity providers in order to liquidate its XRP position with the ultimate aim of reducing market impact and protecting investors to which it was able to achieve.

"Thanks to our trusted partners, our main objective remains to replicate accurately our index and we were able to successfully conduct this ad hoc task despite the difficult trading conditions.”

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In the lawsuit, the SEC alleges Ripple managed to raise $1.3bn through illegal offerings to US investors over the past seven years.

At the crux of the SEC’s argument is the claim XRP is a security not a currency and therefore Ripple did not provide investors with the required information about the risks involved.

As a result, XRP, which was the third-largest cryptocurrency by market value, is down 65% this month.