On November 1, asset manager 21Shares filed an application with the U.S. Securities and Exchange Commission (SEC) to list a spot XRP exchange-traded fund (ETF) on the Cboe BZX Exchange. If approved, this ETF would provide investors with indirect exposure to XRP, as the fund does not directly hold the token. Coinbase Custody Trust Company is set to act as the fund’s custodian, safeguarding XRP assets for 21Shares’ Core XRP Trust.
Rising Interest in Crypto ETFs Amid XRP Legal Developments
The SEC has previously approved spot Bitcoin ETFs but has not yet addressed pending XRP applications due to its ongoing lawsuit with Ripple Labs. Earlier in 2024, a judge ruled that XRP is not considered a security in programmatic sales on exchanges, marking a significant legal milestone. The ruling faces appeals from both the SEC and Ripple, adding to the regulatory complexities around XRP and any related financial products.
21Shares is the third firm to apply for a spot XRP ETF, following Bitwise and Canary Capital, which have also sought to introduce crypto ETFs for Solana and Litecoin. This surge in filings reflects growing investor interest in diversifying digital asset investment options beyond Bitcoin. However, the SEC’s approval timeline remains uncertain, as the regulatory body can opt to delay decisions or request public comments, potentially extending the review process into the next administration.
Potential Changes in SEC Leadership Impacting Crypto ETF Approvals
The upcoming U.S. election may influence the future of crypto ETFs, as some experts speculate that SEC Chair Gary Gensler could be replaced under new leadership. Both Republican Donald Trump and Democrat Kamala Harris have expressed interest in possible SEC reforms, which could shift the agency’s stance on digital asset regulations.
As firms like 21Shares continue to pursue spot ETFs for various cryptocurrencies, the evolving regulatory landscape will be crucial for the development and approval of new crypto-focused investment products in the United States.