Swiss-based 21Shares has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch a spot exchange-traded fund (ETF) tracking XRP, the cryptocurrency associated with Ripple Labs. This move comes amid ongoing legal disputes between Ripple and the SEC, which has accused Ripple of conducting unregistered securities offerings through XRP sales.
The proposed 21Shares Core XRP Trust aims to provide investors with direct exposure to XRP’s price movements. If approved, it would be listed on the Cboe BZX Exchange, with Coinbase Custody Trust Company serving as the custodian. This filing follows a similar application by Bitwise Asset Management, indicating growing interest in XRP-focused investment products despite regulatory challenges.
The SEC’s lawsuit against Ripple, initiated in December 2020, alleges that XRP is an unregistered security. In July 2023, a federal judge ruled that XRP is not a security when sold to retail investors via exchanges, but institutional sales were deemed unregistered securities offerings. The SEC has appealed this decision, and Ripple has filed a cross-appeal, prolonging the legal uncertainty surrounding XRP.
Despite these legal complexities, 21Shares’ filing reflects a strategic bet on the potential for regulatory clarity and approval of XRP-based ETFs in the U.S. market. The outcome of the SEC’s ongoing litigation with Ripple will likely play a pivotal role in determining the feasibility of such investment products.
Investors and market participants are closely monitoring these developments, as the approval of an XRP ETF could significantly impact the cryptocurrency’s market dynamics and broader regulatory landscape.
