- Swiss firm 21Shares files S-1 form with SEC to launch an XRP ETF in the United States
- The proposed 21Shares Core XRP Trust would track XRP’s price through tradeable shares
- Other asset managers, including Bitwise and Grayscale, are also pursuing XRP ETF products
- SEC’s ongoing legal battle with Ripple may impact approval timeline for XRP ETFs
- Ripple CEO predicts XRP ETF approval is “inevitable” following Bitcoin and Ethereum ETF precedents
21Shares Pursues XRP ETF Launch in US Market
Swiss investment firm 21Shares has taken a significant step toward bringing XRP exposure to American investors by filing an S-1 form with the Securities and Exchange Commission (SEC) for an XRP ETF.
The proposed investment vehicle, named the 21Shares Core XRP Trust, aims to offer investors a regulated way to gain exposure to XRP’s price movements through traditional exchange-traded shares.
Growing Interest in XRP Investment Products
The filing comes amid increasing interest from major asset managers in creating XRP-based investment products. Bitwise, a prominent crypto asset manager, has expressed similar intentions to launch an XRP ETF. Meanwhile, Grayscale has already established an XRP Trust and has experience converting crypto investment vehicles into ETFs.
21Shares currently operates spot Bitcoin and Ethereum ETFs in the United States, following the SEC’s historic approval of these products earlier in 2024.
Regulatory Challenges and Legal Context
The path to approval faces potential complications due to the SEC’s ongoing legal dispute with Ripple, the company behind XRP. The regulator initially filed a $1.3 billion lawsuit against Ripple, alleging unregistered securities sales through XRP.
In a significant 2023 court decision, a judge ruled that:
- Programmatic sales of XRP to retail investors did not qualify as securities
- $728 million worth of institutional sales constituted unregistered securities
The SEC recently attempted to impose a $2 billion fine on Ripple, but a New York court reduced the penalty to $125 million. The regulator has appealed this decision.
Industry Optimism Despite Challenges
Despite regulatory hurdles, industry leaders maintain a positive outlook. Ripple CEO Brad Garlinghouse recently stated that XRP ETF approval is “inevitable” given the SEC’s recent acceptance of Bitcoin and Ethereum ETFs.
Ripple’s Chief Legal Officer Stuart Alderoty expressed confidence in the company’s legal position, suggesting that the SEC’s appeal might ultimately benefit the broader cryptocurrency industry.
Market Impact and Position
XRP currently ranks as the seventh-largest digital asset by market capitalization. The potential approval of an XRP ETF could significantly increase institutional access to the asset, following the pattern seen with Bitcoin and Ethereum ETFs.
21Shares emphasized its commitment to expanding U.S. investor access to cryptocurrency assets, positioning the XRP ETF filing as part of its broader strategy to innovate in the American market.
The outcome of this filing could set important precedents for future cryptocurrency investment products, particularly for digital assets that have faced regulatory scrutiny from the SEC.
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