Crypto investment firm Canary Capital has filed an application with the Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF). This move comes just one week after Bitwise, another prominent asset manager, submitted its own proposal for a similar product.
Canary Capital’s Spot XRP ETF Proposal
In its October 8 filing, Canary Capital highlighted that its ETF aims to offer investors exposure to the XRP market via a standard brokerage account. This approach seeks to remove the complexities and risks tied to directly purchasing and holding XRP.
The ETF will track XRP’s price using the Chicago Mercantile Exchange (CME) CF Ripple Index, a real-time price benchmark. Canary Capital emphasized that its fund would not use derivatives, which could expose investors to additional counterparty and credit risks. Instead, it aims to provide a straightforward way for investors to access XRP.
“[Canary Capital] believes the design of the Trust will allow certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies using XRP by investing in Shares, rather than trading XRP directly,” stated the firm.
However, the filing did not reveal key details such as the ETF’s custodian or the ticker symbol under which it would be listed.
Ripple and XRP ETF Developments
Canary Capital’s application closely follows Bitwise’s October 2 filing for a similar spot XRP ETF. Currently, XRP is trading at $0.53, showing a slight increase of 0.4% for the day but remaining stable over the week.
If either Canary Capital’s or Bitwise’s applications receive approval, it would mark the SEC’s first authorization of a spot XRP fund. However, approval is far from certain due to regulatory hurdles. The SEC is currently appealing its lawsuit against Ripple, the issuer of XRP. The regulator alleges that XRP is an unregistered security and claims Ripple unlawfully raised $1.3 billion through its sale.
The SEC’s ongoing legal battle with Ripple presents significant obstacles for both Canary Capital and Bitwise in securing approval for their spot XRP ETFs. Until the dispute over XRP’s regulatory status is resolved, the future of these ETF applications remains uncertain.
