Michaela Alvez
New York-based asset management firm WisdomTree has registered to create an XRP exchange-traded fund (ETF), the first step toward the filing with U.S. Securities and Exchange Commission (SEC).
Reports said that WisdomTree filed for the XRP ETF on November 25 in Delaware. The company’s filing places it alongside Bitwise, Canary Capital, and 21Shares as one of the early applicants for an XRP ETF.
As of now, no applications for XRP ETFs have been approved by the SEC.
Will Ripple Lawsuit Hold Back XRP ETF Approval?
While this progress is encouraging, XRP’s path to becoming an ETF-backed asset is still uncertain, with legal and regulatory hurdles continuing to pose challenges.
In 2020, the SEC filed a lawsuit against Ripple Labs, the company that launched XRP, and its CEO, Bradley Garlinghouse, accusing them of unlawfully raising over $1.3 billion by selling XRP without registering it as a security. The SEC’s complaint alleged that Ripple had been conducting an unregistered securities offering since 2013, selling the digital token to both U.S. and international investors.
The court’s ruling suggested that XRP could still face regulatory scrutiny in institutional settings, especially in cases where it’s sold in large quantities or as part of a securities offering.
The court’s decision regarding secondary markets, where XRP is traded among retail investors, carries important implications. It suggests that XRP might not be classified as a security in these markets, a stance that aligns with the regulatory treatment of other major cryptocurrencies like Bitcoin and Ethereum.
Ripple Labs remains embroiled in an ongoing legal dispute with the SEC. In July 2023, Ripple secured a partial victory when the court ruled that XRP is not considered a security in certain contexts. However, in October 2024, the SEC filed an appeal, with additional proceedings set to take place in January 2025.
If the SEC succeeds in reversing the court’s decision, it could limit XRP’s eligibility for an ETF, as institutional investors may remain hesitant to participate in markets where the token is still classified as a security.
Changes in the US Political Climate; Good News for XRP?
The recent changes in the U.S. political landscape, following the resignation of SEC Chair Gary Gensler and President-elect Donald Trump’s strong support for cryptocurrencies, have raised hopes for more favorable regulatory developments in the sector.
Analysts believe that the appointment of a more crypto-friendly SEC chair could streamline the approval of products like XRP ETFs. Experts are hopeful that the incoming administration will prioritize pro-crypto policies, potentially paving the way for the approval of crypto-backed ETFs.
Read More
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
