US SEC Initiates Initial Official Review of Spot XRP ETF

The potential for trading spot XRP exchange-traded funds (ETFs) in the U.S. has received a significant boost. The U.S. Securities and Exchange Commission (SEC) has begun its formal assessment of an application aimed at launching an XRP ETF within the country.

A recent filing from the regulatory body indicates that it has started the process to evaluate whether to approve or reject a request to list and trade shares of the WisdomTree XRP ETF on the Cboe BZX Exchange. WisdomTree is an investment management firm known for offering one of the few spot Bitcoin ETFs available in the United States.

SEC’s Evaluation of WisdomTree’s XRP ETF

The SEC is scrutinizing whether the proposed adjustments for listing WisdomTree’s XRP ETF on Cboe BZX are structured to mitigate risks of fraud and manipulation. The submission must incorporate safeguards that protect investors and uphold the public’s interest before it can get the green light.

Furthermore, the SEC pointed out that this proposal might bring up new concerns that it has not previously considered, which will need to be resolved. While the review progresses, the Commission has invited public commentary on the potential approval or rejection of the application.

“The Commission seeks input from commenters on the adequacy of the Exchange’s supportive statements for the proposal, as listed in the Notice, along with any other insights they may wish to provide regarding the proposed rule modification,” the SEC noted.

It’s essential to highlight that the commencement of review proceedings does not assure that the SEC will endorse the ETF. The agency has a window of approximately 240 days to make a determination on the proposal’s viability.

Previous Developments

Moreover, if given the green light, the WisdomTree ETF would not mark the inaugural XRP fund listed in the U.S. Just last month, Teucrium, a Vermont-based asset manager, introduced the first leveraged XRP ETF on NYSE Arca. Near the end of that month, three futures ETFs were launched by ProShares, which offered investors leveraged and inverse exposure to XRP via derivatives.

The SEC’s endorsement of a spot XRP ETF could set the stage for similar investment products to emerge. This development would represent a significant achievement for the XRP community, particularly in light of the prolonged legal disputes involving Ripple, the organization behind the token, and the SEC.