Key Takeaways
- Four major asset managers have filed applications for spot XRP ETFs with the SEC.
- The SEC’s decision could set a precedent for future crypto ETF applications.
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The race to launch a spot XRP ETF in the US is officially on. On Thursday, the Cboe Exchange submitted four separate 19b-4 forms with the SEC, seeking approval for a rule change to list and trade shares of spot XRP ETFs from Wisdomtree, Bitwise, 21shares, and Canary.
The filings follow the approval of spot Bitcoin and Ethereum ETFs in early 2024. Each application heavily references the July 2023 SEC-Ripple Labs ruling, which determined that XRP itself is not a security, though the court found Ripple’s institutional sales violated securities laws.
Unlike Bitcoin and Ethereum, XRP lacks a futures market on the CME, which has historically been a key SEC requirement for ETF approvals. The applications argue that alternative measures, including on-chain analytics, price monitoring, and market structure analysis, provide sufficient protection against fraud and manipulation.
Each fund manager presents distinct arguments for XRP’s market stability. WisdomTree emphasizes global liquidity and arbitrage opportunities, while Bitwise draws comparisons with Bitcoin and Ethereum to demonstrate robust price discovery. 21Shares focuses on XRP’s pricing mechanisms and trading volume consistency, and Canary highlights the asset’s use case in payments and remittances.
The applications specifically address the secondary market approach, stating that the ETFs would source XRP from exchanges and trading platforms rather than directly from Ripple Labs, where the SEC previously identified securities law violations.
The 19b-4 filing is a regulatory requirement for new ETF listings. The SEC has 45 days from Federal Register publication to review the filing and make a decision. The regulator can approve, disapprove, or initiate proceedings to determine whether to disapprove the rule change. This review period may be extended to 90 days if the SEC provides reasoning or if Cboe agrees.
Recently, Grayscale applied to convert its XRP Trust into an exchange-traded fund on NYSE Arca to provide broader access to XRP with institutional oversight.
This is a developing story.
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