The SEC is reviewing approval orders for Grayscale and Bitwise funds that include XRP, with decisions expected after August 22.
XRP makes up nearly 6% of both the Grayscale GDLC and Bitwise BITW funds currently under SEC review.
Grayscale argues its XRP ETF received automatic approval after the SEC missed the 240-day decision deadline under the Exchange Act.
The U.S. Securities and Exchange Commission has called for public comments as it reviews the approval of two crypto funds with XRP holdings. Both the Grayscale Digital Large Cap (GDLC) Fund and Bitwise Crypto Index Fund (BITW) received initial approval from the SEC’s Division of Trading and Markets, but those approvals remain stayed as the Commission conducts a further review.
The Commission’s latest Federal Register notice outlines its request for input on the Grayscale GDLC Fund. The fund includes five major digital assets, among them Bitcoin, Ethereum, Solana, Cardano, and XRP. XRP currently comprises 5.99 percent of its total asset composition.
Grayscale had previously secured approval from the SEC’s Trading Division on July 1, enabling the New York Stock Exchange to list the fund. However, the Commission issued a stay order on that approval, which remains in effect.
Grayscale Contests Stay, Citing Exchange Act Timeline
Grayscale has challenged the stay, arguing that under Section 19b of the Securities Exchange Act, the Commission exceeded the statutory 240-day period required to approve or deny a rule change. Since the Commission did not issue a final decision by July 1, Grayscale claims the approval took effect automatically.
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The asset manager and the NYSE also contend that the Exchange Act’s provisions override the SEC’s procedural rules, making the stay invalid.
SEC Reviews Bitwise Fund Holding XRP
In a separate filing, the Commission issued a similar notice regarding the Bitwise 10 Crypto Index Fund. This multi-asset fund also includes XRP, which makes up 5.9% of its holdings. The fund holds a mix of ten digital assets, including Bitcoin, Ethereum, Solana, and Litecoin.
Like the Grayscale fund, the BITW was also approved by the Trading Division and then placed under a stay pending further Commission review.
Public comments are due by August 22 for both the Grayscale and Bitwise fund reviews. Bloomberg analysts noted that further clarity is expected before the end of the month. Approval of these funds could mark the introduction of the first XRP-based exchange-traded products in the United States.
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