SEC may acknowledge Grayscale XRP ETF filing as early as tomorrow
Ripple's legal battles could influence the SEC's decision on Grayscale's new digital asset fund application.
Key Takeaways
- The SEC may acknowledge Grayscale's XRP ETF filing as early as Thursday.
- A court previously ruled XRP tokens were not securities in retail sales but were in institutional sales.
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The US SEC may acknowledge Grayscale and NYSE Arca’s spot XRP ETF filing as early as Thursday, according to FOX Business journalist Eleanor Terrett.
The move is highly anticipated as it would provide insight into how the SEC currently views XRP, a crypto asset that has been at the center of a long-standing legal battle between Ripple and the SEC over its classification.
On behalf of Grayscale, NYSE Arca last month submitted a 19b-4 form to the SEC, seeking rule change approval to list and trade shares of Grayscale’s XRP ETF. The SEC usually has around 15 days to accept an application for review.
The filing came just a few months after the asset manager launched its XRP trust product. By the time the Grayscale XRP Trust hit the market, the legal battle between the SEC and Ripple approached the finish line.
A court ruling in August determined that XRP tokens were not securities when sold to retail investors on exchanges, but were securities when sold to institutions, resulting in a $125 million fine for Ripple.
The SEC has appealed the case’s ruling, and Ripple is fighting back. The case has since been extended and moved to the Court of Appeals for the Second Circuit. Ripple has requested an April 16, 2025, deadline to file its response brief.
Essentially, these legal obstacles will likely impede all attempts to launch an ETF tied to the fourth-largest crypto asset by market cap, not only Grayscale’s.
A number of fund managers looking to launch their respective XRP ETFs are WisdomTree, Bitwise, 21Shares, and Canary Capital. The CBOE Exchange lodged separate 19b-4s for their proposed funds last week.
Due to legal advantages, Bloomberg ETF analysts Eric Balchunas and James Seyffart anticipate Litecoin to spearhead spot crypto ETF approvals, well ahead of XRP, Solana, and Dogecoin ETFs.
Analysts estimate a 90% chance of Litecoin ETF approval this year, given its classification as a commodity by the CFTC, which generally removes it from the SEC’s regulatory purview.
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