XRP News Today: U.S. SEC Halts Bitwise XRP ETF Conversion Citing Legal Uncertainty Amid Ripple Lawsuit

The U.S. Securities and Exchange Commission has abruptly halted the conversion of Bitwise Asset Management’s 10 Crypto Index Fund into an exchange-traded fund (ETF), a move that would have granted investors exposure to XRP and other major altcoins. This decision followed the SEC’s initial approval of the transition just hours earlier, leaving industry observers and analysts puzzled by the sudden reversal.

ETF analyst Nate Geraci has characterized the development as “bizarre,” noting that a similar pattern occurred with the Grayscale Digital Large Cap ETF (GDLC), where the SEC’s staff had initially approved the product before halting its progress without clear justification. In both cases, the agency’s staff initially signaled support for the products before reversing course, creating confusion among market participants about the regulatory roadmap for altcoin-based ETFs.

The SEC’s intervention occurs amid a broader shift in the agency’s stance on crypto assets, with recent leadership emphasizing a more pro-crypto approach. This has raised questions about the rationale for delaying XRP-specific products, particularly as spot-based altcoin ETFs were previously projected for approval in late 2025 under a proposed universal listing framework. The agency’s actions have instead introduced uncertainty, complicating efforts to integrate XRP into mainstream investment vehicles.

Meanwhile, U.S. investors can access leveraged and futures-based XRP and Solana (SOL) ETFs, which do not require direct exposure to the underlying assets. However, the absence of spot-based XRP ETFs—products that directly hold the token—has limited institutional participation and broader market adoption. The SEC’s decision appears to align with its ongoing legal battle with Ripple Labs, the company behind XRP, which is appealing a lawsuit alleging the token is an unregistered security. Legal analysts suggest the agency may be strategically delaying XRP-related products until its legal position on the asset is clarified.

The halted Bitwise and Grayscale efforts highlight the SEC’s discretionary power to pause applications, even after initial staff-level approval. This approach underscores the agency’s dual role as both a regulator and a key player in defining the legal boundaries of crypto assets. While the SEC’s recent approvals of Bitcoin and Ethereum ETFs signaled openness to crypto innovation, its inconsistent treatment of altcoins like XRP has drawn criticism for creating a fragmented regulatory landscape.

Industry stakeholders now face a prolonged period of uncertainty, with the outcome of the SEC’s legal actions against Ripple and its enforcement priorities likely to shape the future of XRP-based investment products. For now, the standoff between regulators and the XRP ecosystem remains a focal point in the broader debate over how to balance innovation with investor protection in the rapidly evolving crypto market.