February 9, 2025
News

Bitwise Files for First XRP Exchange-Traded Fund

On Wednesday, cryptocurrency asset manager Bitwise submitted a registration statement to the U.S. Securities and Exchange Commission (SEC) to establish a spot XRP exchange-traded fund (ETF). This proposed ETF would offer investors direct exposure to XRP, the crypto token created by Ripple Labs. However, its approval may depend on the outcome of a potential SEC appeal of a 2023 court ruling, which declared that XRP trades do not qualify as securities transactions.

In the filing, Bitwise highlighted the risk that a future decision classifying XRP as a security could impact the proposed ETF. The company also emphasized that XRP operates on a decentralized ledger, which enhances its security, accountability, and accessibility. Bitwise refuted past SEC claims that XRP is a security, and outlined that BNY Mellon would act as the trust’s administrator and transfer agent, while Coinbase Custody would serve as the custodian.

SEC Appeal Deadline Approaching

The filing coincides with the ongoing legal battle between the SEC and Ripple regarding XRP’s classification as an unregistered security. The SEC has until Monday, October 7, to appeal the 2023 ruling that secondary XRP sales via crypto exchanges are not securities transactions.

Alex Thorn, head of research at Galaxy Digital, remarked that it would be surprising if the SEC chose not to appeal, noting that a successful appeal could significantly hinder the approval prospects for Bitwise’s XRP ETF.

Bitwise acknowledged the litigation risks in its filing, stating that if XRP is classified as a security by the courts, it could lead to the liquidation of the trust. In addition to the XRP ETF filing, Bitwise has already launched spot Bitcoin and Ether ETFs in the U.S.