New York, Sunday, October 20, 2024-The US Securities and Exchange Commission (SEC) is expected to delay approval of exchange-traded funds (ETFs) tracking XRP, experts suggest, until the ongoing legal battle surrounding the token’s classification as a security is resolved.1
The SEC’s caution arises from concerns over market manipulation and cybersecurity risks.
Applications for XRP ETFs have been filed by Bitwise Asset Management and Canary Capital, following the successful launches of Bitcoin and Ethereum spot ETFs earlier this year. Despite these launches, XRP’s murky legal status continues to hinder its ETF prospects.
The SEC’s reluctance stems from the unresolved legal dispute between Ripple Labs, the company behind XRP, and the regulator. Ripple has been engaged in a legal battle with the SEC since 2019, with the commission alleging that Ripple unlawfully sold XRP as an unregistered security. Though a partial legal victory was secured by Ripple in 2023, the SEC’s appeal leaves uncertainty surrounding XRP’s classification. Analysts predict that the SEC will not approve an XRP ETF until the legal case is fully resolved.
Despite the delay, many believe XRP ETFs are inevitable due to the token’s strong institutional adoption. However, XRP-focused funds have underperformed amid Ripple’s legal troubles, with only $86 million in assets under management, compared to larger holdings for other cryptocurrencies.
Ripple’s legal battle has slowed XRP’s market growth, despite the token’s use in cross-border payments. Approval of an XRP ETF could significantly boost the token’s market performance.
- cryptonews.com: https://cryptonews.com/exclusives/us-sec-unlikely-to-approve-spot-xrp-etfs-experts/[↩]
