XRP Spot ETF Update: SEC Advances WisdomTree Proposal Review

US SEC has initiated a new phase of review for the WisdomTree XRP spot ETF proposal. Reportedly, the SEC is examining the WisdomTree XRP ETF proposal, submitted by Cboe BZX Exchange, to determine if it meets the legal standards under the Securities Exchange Act of 1934. Will the commission’s move lead to the approval of the first US-based XRP Spot ETF?

WisdomTree’s XRP Spot ETF Proposal Enters Next Phase of SEC Review

Notably, the SEC is evaluating WisdomTree’s XRP spot ETF proposal, seeking public opinion. The SEC issued a notice (Release No. 34-103124) seeking public feedback on investor protection and market manipulation measures for the proposed fund. Notably, the agency has a 240-day window to make a decision on WisdomTree’s ETF application, either approving or rejecting it.

While no decision has been made, the commission has progressed the proposal to the next stage of review, as outlined in Section 19(b)(2)(B). If approved, this will be the first XRP spot ETF to receive a green light from the US SEC.  Notably, this development comes amid Ripple CLO Stuart Alderoty’s recent letter to the SEC, urging them to fix the regulatory gap. Many view this development as bringing the XRP ETF launch closer to reality. Alderty wrote,

Absent delegated authority, new legal standards must be established by lawmakers. SEC guidance that adheres faithfully to existing law—something that eluded the prior administration—would go a long way toward reducing market confusion.

XRP Spot ETF: A Step Closer to Reality?

As the SEC has entered into an advanced stage of the asset manager’s XRP spot ETF application, it indicates that the investment fund is possibly closer to the final approval. Fetching public comments on the potential benefits of the ETF, the agency will move into the final review stage. Now, the commission is expected to conduct a detailed analysis of the proposal’s structure, market impact, and compliance with securities laws. The recent conclusion of Ripple Lawsuit in March earlier this year added lot of regulatory clarity and paved the way for institutions to accept XRP. This led to launch of first XRP futures ETF on CME along with BTC and ETH.

The commission will now scrutinize the ETF’s design, potential risks, and benefits, ensuring it meets regulatory standards. Thus, determining whether the product can provide a secure and compliant investment opportunity, the regulator will ultimately decide the ETF’s fate.

Significantly, this development signals a positive development towards the XRP spot ETF launch. While the SEC has officially acknowledged multiple XRP ETF applications, none have received a final nod. However, the XRP lawsuit major progress and the regulatory clarity surrounding cryptocurrency have significantly paved the way for the ETF, making its approval more feasible. As recently reported by CoinGape, the XRP ETF odds rise to 83% despite the agency’s delay on the decision.