"Major Asset Managers Bet on XRP ETFs Amid Regulatory Hurdles"

Major asset managers are ramping up efforts to launch spot XRP ETFs, signaling a pivotal moment in the evolving landscape of cryptocurrency regulation. With recent applications submitted to the SEC, firms are attempting to navigate the complexities surrounding XRP’s regulatory status while addressing market demands.

Cboe, a leading exchange operator, has filed applications to list and trade spot XRP ETFs from WisdomTree, Bitwise, 21Shares, and Canary. This move comes amidst a broader crypto slump, with XRP down 25% over the last two weeks. Despite the recent decline, asset managers are betting on XRP’s recovery and the growing interest in crypto investment vehicles.

Unlike Bitcoin and Ethereum, which have well-established futures markets, XRP faces significant regulatory hurdles. Cboe’s filings represent a critical attempt to fortify XRP’s position as an ETF candidate while addressing the SEC’s regulatory uncertainties. The company cites the July 2023 ruling in the SEC v. Ripple Labs case, where XRP sales were partially classified as not being securities. This ruling is central to legitimizing the ETF efforts, with asset managers focusing on compliance frameworks designed to appease regulators.

In a bid to enhance their chances of receiving SEC approval, asset managers are implementing strict safeguards. One notable strategy involves sourcing XRP from secondary markets rather than directly from Ripple Labs. This decision aims to distance the ETF from Ripple Labs’ legacy and the associated regulatory scrutiny. Moreover, applications include measures such as advanced surveillance systems, third-party custody arrangements, and cold storage of XRP to further ensure market integrity.

The new filings are part of a broader strategy to pave the way for XRP ETFs amid an ongoing SEC appeal of the Ripple decision. The SEC has 45 days to review these applications and can extend this to 90 days if necessary. The outcome will be crucial not just for XRP but for the broader ETF landscape as regulators continue to revise their approaches to digital assets.