- SEC is reviewing the WisdomTree XRP spot ETF, which would let investors buy XRP without owning the tokens directly.
- Ripple calls for clearer rules, while the SEC assesses market risks and investor protections.
The long-anticipated XRP spot exchange-traded fund (ETF) in the United States is taking a significant step forward. The U.S. Securities and Exchange Commission (SEC) has officially begun its review of the WisdomTree XRP Trust, the first proposed spot ETF offering direct exposure to XRP without requiring investors to hold the token themselves.
What Is the WisdomTree XRP Trust?
Filed by the Cboe BZX Exchange, this ETF would track XRP’s market price using the CME CF Ripple-Dollar Reference Rate. This approach allows investors to gain XRP exposure through their regular brokerage accounts, eliminating the complexities of private key management or self-custody typically associated with cryptocurrency investments.
If approved, this ETF would mark a historic milestone — the first U.S.-based spot ETF for XRP. It could also open the door for other crypto asset spot ETFs, helping bridge traditional finance and the crypto market more seamlessly.
SEC Review Process and Investor Protection Concerns
The SEC has 240 days to decide whether to approve or reject the application. Alongside this, the agency is actively seeking public input on two critical issues: protection against market manipulation and safeguards for investors. These concerns are central to the SEC’s evaluation, as cryptocurrency markets have faced scrutiny over price manipulation risks and regulatory uncertainties.
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Ripple’s Legal Standpoint
Ripple’s Chief Legal Officer, Stuart Alderoty, recently addressed the SEC’s crypto task force to clarify Ripple’s position on XRP’s regulatory classification. He emphasized that XRP should not be automatically treated as a security, arguing that current rules need to be clearer for all market participants, including issuers, brokers, and exchanges.
Alderoty pointed out the regulatory confusion caused by ambiguous terms like “fully functional” or “decentralized,” which complicate the classification of digital assets. Clearer guidance, he suggests, will benefit the entire industry and reduce legal uncertainties.
Approval of the WisdomTree XRP Trust could significantly enhance XRP’s accessibility for mainstream investors, who often hesitate to deal with cryptocurrency wallets or exchanges. With a spot ETF, investors can add XRP to their portfolios via familiar investment vehicles, potentially increasing liquidity and demand.
While the SEC’s cautious approach reflects ongoing regulatory challenges, this review is an encouraging sign of progress toward broader crypto adoption within regulated markets.
The move to approve a spot XRP ETF signals evolving regulatory openness and may pave the way for more crypto investment products. Investors and industry watchers will be closely following the SEC’s decision in the coming months, marking a pivotal moment for XRP and the broader crypto landscape.
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