The U.S. Securities and Exchange Commission (SEC) has formally initiated a review of the WisdomTree XRP Trust, a proposed spot exchange-traded fund (ETF) that would provide investors with exposure to XRP. This significant development marks the first formal SEC review of a U.S.-based spot XRP ETF, filed by the Cboe BZX Exchange.
If approved, the WisdomTree XRP Trust would become the first spot XRP ETF in the United States, setting a powerful precedent that could pave the way for similar products across other cryptocurrencies. The ETF is designed to track XRP’s market price via the CME CF Ripple-Dollar Reference Rate, enabling investors to gain exposure to XRP through traditional brokerage accounts without the complexities of managing private keys or self-custody.
In light of this application, the SEC has published a notice under Release No. 34-103124, thereby initiating a more thorough evaluation process. The Commission now has up to 240 days to either approve or reject this filing. During this period, the SEC is also soliciting public comments regarding the ETF’s design, specifically whether it adequately addresses ongoing concerns related to market manipulation and investor protection.
In a recent development, Ripple’s Chief Legal Officer, Stuart Alderoty, submitted a letter to the SEC’s cryptocurrency taskforce, emphasizing that XRP should not be classified as a security on its own. Alderoty argued for the need for clear rules that benefit all market participants, warning that reliance on ambiguous terms such as “fully functional” or “decentralized” could generate more regulatory confusion than clarity.
As the SEC moves forward with its review, the outcome may have far-reaching implications, not only for XRP but for the broader cryptocurrency market. The approval of the WisdomTree XRP Trust could signal a shift in regulatory stance, offering a more defined path for future crypto-related investment products.
