21Shares Files for XRP ETF with SEC
In a significant move that aligns with industry trends, 21Shares officially submitted an application to the U.S. Securities and Exchange Commission (SEC) on November 1 for a United States-based XRP exchange-traded fund (ETF). This initiative signals growing interest and optimism in the cryptocurrency market, particularly in assets like XRP.
Details of the Proposed Fund
If granted approval, the fund dubbed the 21Shares Core XRP Trust will be listed on the Cboe BZX Exchange. To ensure the safety and custody of the assets, Coinbase Custody Trust Company will act as the custodian for the fund. This setup is geared to provide a regulated and secure investment vehicle for those looking to gain exposure to XRP.
Competition in the XRP ETF Space
21Shares is not alone in its quest; it becomes the third company to pursue SEC approval for an XRP ETF, following in the footsteps of Bitwise and Canary Capital. This wave of applications underscores the increasing demand for financial products linked to XRP, especially as Ripple’s CEO Brad Garlinghouse recently remarked that an XRP ETF seems “inevitable” in light of growing market interest.
Challenges Ahead for XRP ETFs
Despite the optimistic outlook, the road to obtaining SEC approval for the XRP ETF poses several challenges. The SEC has been particularly stringent in its regulatory approach, especially concerning Ripple Labs, which has been embroiled in legal disputes affecting XRP’s classification. The organization has made strong claims that Ripple’s sales of XRP constituted unregistered securities. Ripple, on its part, has strongly contested this characterization.
Recent Legal Developments
In a notable ruling last year, Judge Analisa Torres of the U.S. District Court for the Southern District of New York rendered a mixed decision on the matter. She determined that specific programmatic sales of XRP were not in violation of securities laws due to their blind bid structure. Nevertheless, she confirmed that direct institutional sales did, in fact, qualify as securities. This nuanced ruling adds complexity to the narrative surrounding XRP and its future in the ETF market.
Growing Interest in Crypto ETFs
The SEC’s cautious stance on XRP-related products could impact the application process, but it is crucial to note that overall interest in crypto ETFs has surged. Earlier this year, the SEC approved its first spot Bitcoin ETFs, alongside a flurry of Ethereum ETFs, which has set a promising precedent for other cryptocurrencies, including XRP. Analysts believe that the potential acceptance of an XRP ETF could represent the next significant wave of crypto financial products entering the U.S. market.
Future of the XRP ETF
If the 21Shares Core XRP Trust gains SEC approval, it would mark a pivotal moment for XRP, being positioned as the third crypto-based ETF launched in the U.S. in 2024. Such a development would not only diversify investment options in the rapidly evolving digital asset space but also demonstrate a continued maturation of the cryptocurrency market in terms of regulatory acceptance.