SEC Sets Timeline for XRP ETF Decision
The Securities and Exchange Commission (SEC) has established a deadline for making a crucial decision regarding the approval of an exchange-traded fund (ETF) that tracks the price of XRP (XRP). In a notable development, the SEC has acknowledged a 19b-4 filing submitted by the New York Stock Exchange (NYSE) in collaboration with asset management firm Grayscale. This marks the first instance where the SEC has responded to a filing concerning this particular cryptocurrency asset.
This acknowledgment signifies that the SEC now has a window of up to 240 days to reach a decision on the proposed filing. While the agency has previously recognized several other applications for crypto-focused ETFs—covering assets like Solana (SOL), Litecoin (LTC), and Dogecoin (DOGE)—the current situation holds particular weight due to the ongoing legal battle between the SEC and Ripple, the organization behind XRP.
In December 2020, the SEC initiated a lawsuit against Ripple, alleging that the company had violated U.S. securities laws by selling XRP as an unregistered security to raise funds. However, a significant ruling in August 2023 found in favor of Ripple, determining that XRP is not classified as a security when sold on secondary markets, according to a federal judge’s decision.
Following this ruling, the SEC filed an appeal on January 15, asserting that Ripple’s method of selling XRP aligns with the criteria outlined in the Howey Test, a Supreme Court precedent that serves as a benchmark for identifying securities. As expressed by Nate Geraci, President of the ETF Store, “They could have easily rejected this filing. Enormous message [in my opinion].”
In a recent analysis, Bloomberg ETF analysts James Seyffart and Eric Balchunas indicated a 65% probability of an XRP ETF being approved by the end of 2025. They assigned the highest likelihood of approval to a Litecoin ETF at 90%, followed by Dogecoin at 75% and Solana at 65%. The SEC is expected to provide a decision on all the pending ETF applications for these assets in October.
