Recent Developments Regarding Spot XRP ETFs in the US ?
This article explores the latest proposals for the establishment of a spot XRP ETF in the United States, examining how the political landscape may influence regulatory decisions and highlighting key players in the ongoing discussion.
Initial Proposals for an XRP ETF ?
Recently, there has been a surge in requests for the introduction of XRP ETFs, with notable submissions from Canary Capital, Bitwise, and 21Shares. The notable aspect of these applications is that they were made prior to Donald Trump’s electoral success.
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Under the administration of Joe Biden, the approval of any crypto-related spot ETF-excluding Bitcoin and Ethereum-remained absent. Moreover, during this period, the SEC initiated legal action against Ripple and XRP, aiming to classify XRP as an unregistered security.
While a court later determined that XRP does not meet the criteria for being classified as an unregistered security, the likelihood of approval for an XRP spot ETF under a Democratic administration remained quite slim. Nevertheless, three firms submitted requests before the election, likely anticipating Trump’s eventual victory.
Impact of Trump’s Election on Crypto Regulations ??
During Trump’s election campaign, he expressed a supportive stance towards cryptocurrencies. After taking office, he even organized a dedicated team to evaluate the possibility of creating a national strategic reserve in Bitcoin.
Following his victory, Gary Gensler, the former chair of the SEC, announced his resignation. Mark Uyeda, a Republican who supports cryptocurrency, took over as interim chair. There is strong speculation that Trump’s upcoming appointee to lead the SEC will be Paul Atkins, who is also known for his pro-crypto views.
Consequently, the likelihood of an SEC sanction for a spot XRP ETF has considerably increased. However, investment expert James Seyffart from Bloomberg suggests that there is only a 65% probability of approval happening by the year’s end, emphasizing that the SEC has until October to reach a decision.
Historically, the SEC has exercised caution and taken ample time when evaluating such requests, suggesting that if the termination date remains set for October, earlier approvals may be unlikely.
New Filing by MEMX ?
In recent updates, another application for a spot XRP ETF has come to light. This submission originates from MEMX and prominently features the term “Commodity-Based Trust.”
A court ruling now verifies that XRP cannot be categorized as a security in the US. However, this ruling does not clarify XRP’s status as a commodity; it merely states that XRP is not classified as an investment contract.
In general, assets such as cryptocurrencies that do not qualify as securities are often regarded as commodities. For instance, the SEC under Gensler recognized Bitcoin as a commodity, and the approval of spot Ethereum ETFs indicates a similar classification for Ethereum.
Interestingly, previous ETF requests focused on XRP had not invoked the specific language of a commodity trust. The use of this terminology in the MEMX application may signify a strategic shift, not only on the part of the applicants but also potentially reflecting a change in stance from the SEC.
As it stands, numerous requests for crypto ETFs have been introduced to the SEC, covering a wide range of altcoins, including Litecoin, Dogecoin, and Solana, reflecting the broadening interests within the digital asset space.
Overall, the developments regarding spot XRP ETFs not only mirror the evolving landscape of cryptocurrency regulations but also underscore the significant impact of political leadership on financial oversight and advancements within the sector.
For deeper insights, you can explore the following key phrases:
- spot XRP ETF
- SEC approval
- XRP classification
