$XRP

SEC Begins Review of WisdomTree's Spot XRP ETF Proposal

The U.S. Securities and Exchange Commission (SEC) has officially commenced its review of WisdomTree’s proposal for a spot XRP exchange-traded fund (ETF), marking the first of its kind in the United States. If approved, this ETF would enable traditional investors to gain exposure to XRP without the need for direct crypto custody.

The application, initially submitted by the Cboe BZX Exchange, seeks to list a fund that tracks the price of XRP using the CME CF Ripple-Dollar Reference Rate. The SEC’s evaluation will assess whether the proposal adequately safeguards investors and incorporates sufficient measures to prevent market manipulation.

The Commission’s recent Release No. 34-103124 confirmed the beginning of the review process, during which public comments are being solicited to address investor protection and market integrity. The SEC has a 240-day period to approve or deny the application.

Ripple’s Chief Legal Officer, Stuart Alderoty, submitted a letter to the Commission arguing that XRP should not be classified as a security. In response to Commissioner Hester Peirce’s question—“When does a digital asset become distinct from an investment contract?”—Alderoty emphasized the need for clear regulations applicable to all market participants, cautioning against reliance on ambiguous criteria such as “fully functional” or “decentralized.”

Amid a more crypto-friendly political climate, other firms including Grayscale and Bitwise have also submitted XRP ETF proposals. While the SEC has acknowledged their applications, the review process has experienced delays, with analysts projecting potential decisions by October.

Following its $50 million settlement with the SEC, Ripple has resolved the longstanding legal dispute over XRP’s classification, enhancing the likelihood of ETF approval. Analysts suggest that, beyond Bitcoin and Ethereum, XRP or Solana may emerge as the next viable candidates for spot ETFs.#xrp