Cboe Files for XRP ETFs Amid SEC Uncertainty

Chicago’s Cboe Exchange has officially filed four separate applications with the U.S. Securities and Exchange Commission (SEC), aiming to list and trade spot XRP exchange-traded funds (ETFs).

The filings—submitted on Thursday, February 8—represent efforts from major asset managers, including:

• WisdomTree
• Bitwise
• 21Shares
• Canary

These firms are now competing to launch the first XRP ETF in the U.S., following the breakthrough approvals of Bitcoin (BTC) and Ethereum (ETH) ETFs last year.

XRP Faces Market Challenges Despite ETF Push

Even as interest in XRP ETFs gains momentum, XRP’s price has been in freefall.

The fourth-largest cryptocurrency has dropped 25% in the past two weeks, failing to sustain its late-January rally, which briefly pushed it close to its all-time high of $3.40.

This slump mirrors a broader cooling in the crypto market, following a bullish surge late last year—largely driven by Donald Trump’s election victory and growing institutional interest in digital assets.

The Regulatory Hurdles for XRP ETFs

Unlike Bitcoin and Ethereum, XRP has not yet received the clear regulatory classification that would pave the way for SEC approval.

All four Cboe ETF applications lean on Ripple’s partial legal victory in July 2023, where a court ruled that programmatic XRP sales to retail investors did not constitute securities transactions.

The filings argue that XRP should not be classified as a security, with Cboe stating:

“Cboe believes it is applying proper legal standards in making a good faith determination that XRP is not under these circumstances a security under federal law.”

However, the SEC is still appealing this decision to the Second Circuit Court, aiming to overturn the ruling and establish greater control over XRP’s regulatory status.

Key Differences From Bitcoin and Ethereum ETFs

A major challenge for XRP ETF approval is the lack of a CME futures market—a factor that played a crucial role in the SEC’s approval of spot Bitcoin and Ethereum ETFs.

The Cboe filings follow a similar strategy used in Solana ETF applications, which were recently resubmitted after addressing SEC concerns.

To improve their chances of approval, asset managers have implemented protective measures, including:

• Sourcing XRP from secondary markets rather than directly from Ripple Labs
• Enhanced surveillance and market monitoring
• Custody with licensed third-party custodians
• Holding XRP in cold storage
• Mechanisms to halt intraday trading in extreme conditions

What’s Next for XRP ETF Approval?

The SEC now has 45 days to review the applications once they are published in the Federal Register. If additional reviews are needed, the timeline could be extended by up to 90 days.

As the crypto industry waits for regulatory clarity, XRP remains in uncharted territory, with its ETF future hinging on the SEC’s evolving stance—and the outcome of its legal battle with Ripple.