Cboe BZX Exchange has submitted four separate applications to the U.S. Securities and Exchange Commission (SEC) for spot XRP exchange-traded funds (ETFs), marking a new chapter in crypto investment products.
The applications, filed on February 6th under Rule 19b-4, were made on behalf of WisdomTree, Bitwise, 21Shares, and Canary Capital. These proposed ETFs aim to track XRP's price movements, currently the fourth-largest cryptocurrency by market capitalization.
The filing structure suggests that authorized participants would not directly engage in XRP transactions during ETF creation or redemption. Instead, the funds would provide exposure to XRP's price without requiring direct cryptocurrency holdings.
In its applications, Cboe addresses potential regulatory concerns by highlighting that while XRP lacks a futures market unlike Bitcoin and Ethereum, alternative mechanisms exist to prevent fraud and market manipulation. The exchange argues this makes a surveillance-sharing agreement unnecessary for XRP ETFs.
The timing of these applications follows Ripple Labs' partial victory in its legal battle with the SEC in mid-2023. Ripple CEO Brad Garlinghouse responded to the filings with a clock emoji, hinting at anticipated regulatory decisions.
Once the SEC acknowledges receipt of the applications, the agency will have 240 days to review and make its decision. The wave of applications reflects growing institutional interest in XRP-related investment products.
Some asset managers, like WisdomTree, plan to source XRP exclusively from secondary markets to avoid direct association with Ripple Labs, potentially improving their chances of regulatory approval.
The SEC's recent approval of spot Bitcoin and Ethereum ETFs under acting chairman Mark Uyeda, who has shown openness to cryptocurrencies, may set a precedent for these new XRP ETF applications.