Bitwise Files for First XRP Exchange-Traded Fund

By
Kyle Torpey
Kyle Torpey Headshot
Full Bio
Kyle Torpey has been writing about Bitcoin since 2013. His work has been featured in Forbes, Fortune, Bitcoin Magazine, Wired UK, and many other media outlets. He has also attracted more than 50,000 followers on Twitter.
Learn about our editorial policies
Published October 02, 2024
03:33 PM EDT
A photo illustration shows the XRP crypto coin logo on a cell phone screen, with stock market charts in the background.

SOPA Images / Getty Images

Key Takeaways

  • Cryptocurrency asset manager Bitwise on Wednesday filed a registration statement with the Securities and Exchange Commission (SEC) to create a spot XRP exchange-traded fund (ETF).
  • Approval of the XRP ETF, based on the crypto token of Ripple Labs, may partially hinge on the outcome of a potential SEC appeal of a 2023 ruling that said XRP trades weren't securities transactions.
  • In its filing, Bitwise acknowledged the potential risk that the future classification of XRP as a security could pose to the proposed ETF.

Crypto index fund manager Bitwise on Wednesday filed an S-1 registration statement with the Securities and Exchange Commission (SEC) to launch a spot XRP exchange-traded fund (ETF) that would give investors direct exposure to Ripple Labs's XRP (XRPUSD) crypto token.

In the filing, Bitwise explicitly stated that XRP isn't a security—countering past SEC assertions—and emphasized that XRP operates on a decentralized ledger, which generally can enhance accountability, security, and accessibility. According to the filing, BNY Mellon will serve as the trust’s administrator and transfer agent, while Coinbase Custody will act as the custodian.

SEC's Appeal Date in XRP Ruling Nears

The filing comes at a time when the SEC is still in a legal dispute with Ripple over the classification of XRP as an unregistered security. The SEC has until Monday, Oct. 7, to appeal a 2023 federal court ruling that secondary sales of XRP through crypto exchanges aren't securities transactions.

According to Galaxy Digital's head of research, Alex Thorn, it would be surprising if the SEC doesn't appeal the decision. Such an appeal's success would make the chances of approval for this ETF proposal effectively zero, he posted Tuesday on the social media platform X.

Bitwise acknowledged the continuing litigation in its filing, noting that if XRP is deemed a security by the courts, it could force the liquidation of the proposed trust under certain conditions. In addition to this new filing for an XRP ETF, Bitwise has already launched spot bitcoin and ether ETFs in the U.S.

Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Securities and Exchange Commission. "Bitwise XRP ETF."

  2. X Platform. "@intangiblecoins, 4:33 PM, Oct 1, 2024."

  3. Bitwise Asset Management. "Crypto Funds Backed by Crypto Specialists."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.