21Shares Files for XRP ETF Amid Ongoing Ripple-SEC Battle

Swiss-based cryptocurrency exchange-traded fund (ETF) issuer 21Shares has filed paperwork with the U.S. Securities and Exchange Commission (SEC) to launch an XRP-focused ETF. The move, which could offer American investors the opportunity to gain exposure to the seventh-largest cryptocurrency by market cap, comes as the SEC continues its lengthy legal battle with XRP’s parent company, Ripple.

Filed on Friday, the S-1 registration form outlines 21Shares’ intent to launch the 21Shares Core XRP Trust, an ETF designed to track the price of XRP through shares that trade throughout the day. If approved, it would mark a significant step in making XRP more accessible to U.S. investors, as 21Shares has stated its dedication to expanding U.S. investor access to the crypto asset class.

In a statement, the firm emphasized its commitment to innovation within the U.S. market, saying it “remains committed to working towards expanding U.S. investor access to the cryptocurrency asset class, and we look forward to driving innovation in the U.S.”

Growing Interest in XRP ETFs Amid Ripple’s Legal Disputes

The interest in an XRP ETF has grown despite the SEC’s ongoing lawsuit against Ripple. In December 2020, the SEC filed a $1.3 billion lawsuit against Ripple, alleging that it sold unregistered securities in the form of XRP tokens. However, Ripple scored a partial legal victory last year when a judge ruled that XRP sales to retail investors did not qualify as securities. The ruling was celebrated as a significant win for Ripple and the broader crypto industry, though institutional sales worth $728 million were still deemed unregistered securities.

The SEC has continued to press its case, recently seeking a $2 billion fine against Ripple. However, a New York court ordered Ripple to pay a significantly smaller penalty of $125 million. Ripple’s Chief Legal Officer Stuart Alderoty recently expressed confidence that the SEC’s appeal will “backfire,” potentially bolstering the crypto industry’s stance on regulatory issues.

The Path to U.S. XRP ETFs: 21Shares, Grayscale, and Bitwise

21Shares isn’t the only asset manager interested in an XRP ETF. Grayscale, known for its Bitcoin and Ethereum Trusts, recently launched an XRP Trust and has previously converted its closed-end Bitcoin and Ethereum funds into fully tradable ETFs following SEC approval. Bitwise, a major crypto asset manager, has also expressed interest in offering an XRP ETF, illustrating the growing demand for regulated investment products that track the popular digital asset.

21Shares already operates spot Bitcoin and Ethereum ETFs in the U.S., thanks to SEC approvals granted earlier this year. The company is leveraging its experience in the crypto ETF space as it pursues regulatory approval for the XRP ETF, despite the uncertainties surrounding Ripple’s legal position in the U.S. market.

Ripple’s Confidence in an XRP ETF Approval

Despite the legal headwinds, Ripple CEO Brad Garlinghouse remains optimistic about the SEC’s eventual approval of an XRP ETF. In a recent interview, Garlinghouse expressed his belief that the regulator’s green light for Bitcoin and Ethereum ETFs makes XRP approval “inevitable.” His comments reflect Ripple’s resilience amid ongoing legal challenges and suggest that the company is positioning itself for a future where XRP-based financial products are commonplace.

As the crypto industry navigates an increasingly complex regulatory landscape, the potential approval of an XRP ETF would mark a milestone for digital asset investment in the U.S. It would signal a shift in regulatory attitudes toward XRP and set a precedent for similar crypto products to enter the market.

Conclusion: A New Chapter for XRP and U.S. Crypto ETFs?

If approved, the 21Shares Core XRP Trust could provide American investors with a regulated means to invest in XRP, potentially broadening XRP’s role in traditional finance. While Ripple’s legal battle with the SEC remains ongoing, the filing of an XRP ETF underscores the asset’s demand among investors and the growing push for regulatory clarity in the crypto space.

As the market awaits the SEC’s decision, the move by 21Shares highlights both the challenges and opportunities for crypto-based ETFs in the U.S., setting the stage for what could be a transformative period for XRP and digital asset investment products.