XRP News Today: SEC's Shutdown Stalls Crypto ETFs as Institutional Demand Grows

The U.S. Securities and Exchange Commission's prolonged silence on cryptocurrency exchange-traded fund (ETF) applications has left investors and issuers in limbo, with XRP and Cardano (ADA) spot ETFs remaining unapproved amid a federal government shutdown. The SEC's limited operations have stalled critical reviews, delaying decisions on over 20 active ETP filings for altcoins and complicating the broader integration of digital assets into traditional markets, according to a Yahoo Finance report.

ProShares recently filed for a diversified crypto ETF tracking the CoinDesk 20 Index, which includes Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL), among others. The fund would use swaps and derivatives instead of direct crypto holdings and could become one of the first U.S. ETFs offering exposure to multiple major cryptocurrencies, according to a Blockchain Magazine article. This move reflects growing institutional demand for regulated crypto products, with firms like VanEck and 21Shares also modifying filings to reduce fees and expand offerings. However, the SEC's backlog has left even well-established applications, such as Franklin Templeton's XRP ETF, in regulatory purgatory, a TradingView report noted.

The shutdown, now the second-longest in U.S. history, has exacerbated uncertainty. The SEC's operations plan allows limited staff to handle only essential functions, freezing final approvals for ETFs and other rulemakings, as a Cryptonomist article explains. Andrew Jacobson, a former 21Shares legal head, told Yahoo Finance that the agency typically accelerates reviews in autumn once operations resume, predicting a "swarm" of approvals post-shutdown. This optimism contrasts with the current 7% probability on Polymarket that the government will reopen by October 31, raising fears of surpassing the 35-day shutdown record set in 2013, according to a Bitcoinsistemi article.

Market reactions to the delays have been mixed. XRP, which recently plummeted 40% amid broader crypto liquidations, has seen institutional interest persist despite the uncertainty, with 20 active ETP filings for the token—double Ethereum's count. Ripple's recent legal victory over the SEC has bolstered XRP's profile in cross-border payments, though ETF approvals remain key to broader adoption, a TradingView analysis suggested. Meanwhile, Grayscale's Cardano ETF application has also stalled, despite September rule changes that slashed approval timelines to 75 days for eligible cryptocurrencies.

Analysts like James Seyffart of Bloomberg Intelligence anticipate a surge of over 100 crypto ETFs in the next year if the streamlined process holds, as the Yahoo article observed. However, the tokenization framework delay—a separate SEC rulemaking—adds operational risks for firms planning new products. Firms are advised to document governance steps now to fast-track approvals once reviews resume, the Cryptonomist article recommended.

With the Senate preparing its 11th vote to fund the government, the immediate outlook remains uncertain. For now, the crypto market's pent-up demand and institutional engagement persist, but the SEC's eventual resumption of full operations will likely dictate the next phase of ETF approvals and market integration, the Bitcoinsistemi piece concluded.