SEC Faces May 22 Deadline for XRP Spot ETF Decision

Crypto researcher SMQKE has highlighted May 22 as a critical date for the potential approval of XRP spot ETFs. In a post on X, SMQKE indicated that the SEC must respond to Grayscale’s XRP spot ETF filing by this date. This deadline has gained prominence following the recent approval of Teucrium’s 2x Leveraged XRP ETF, which has set a precedent for the regulatory treatment of XRP-related financial products.

The SEC has formally acknowledged several applications for XRP spot ETFs, marking an important step in the regulatory process. While acknowledgment does not guarantee approval, it signals that the agency is actively reviewing these applications. The approval of Teucrium’s leveraged XRP product, which involves complex financial instruments and higher risk, has raised questions about the SEC’s rationale for potentially rejecting simpler spot-based products.

Teucrium’s 2x Leveraged XRP ETF, which relies on returns from European ETPs and swap agreements, was approved despite its complexity and risk profile. This approval strengthens the argument for the potential approval of a spot XRP ETF, as leveraged ETFs aim to amplify daily returns, introducing greater volatility. The success of Teucrium’s XRP ETF launch, as revealed by the company’s CEO, further underscores the market’s interest in these products.

The SEC’s approach to crypto regulation appears to be evolving. Over the past few months, the Commission has dropped several crypto-related lawsuits, including the long-running lawsuit against Ripple. Although the SEC has not formally endorsed cryptocurrencies, this move has been interpreted by many in the crypto space as a signal of a broader policy shift. This shifting stance is reflected in the agency’s willingness to engage with ETF applications tied to cryptocurrencies, suggesting that concerns about market manipulation and investor protection may not hold in the current regulatory environment, especially when riskier products like leveraged ETFs are approved.

Investors are eagerly awaiting the May 22 deadline, as many market participants believe that the approval of ETFs will help XRP grow substantially. Whether the SEC grants or denies the application, the justification provided will likely influence how future XRP-related financial products are treated. The outcome of this decision will be closely watched by market participants, as it could set a precedent for future ETF approvals in the cryptocurrency space and provide greater clarity on the regulatory status of digital assets.