CBOE Submits Four Ripple ETF Applications: What You Need to Know
Cboe Global Markets, known for its Chicago Board Options Exchange, has taken a significant step towards introducing spot XRP exchange-traded funds (ETFs) by submitting four separate 19b-4 applications to the US Securities and Exchange Commission (SEC). This move represents a crucial advancement in the quest for regulatory approval of these innovative investment products.
Key Details of the XRP ETF Applications
The applications, filed on behalf of notable issuers such as WisdomTree, Bitwise, 21Shares, and Canary, follow the issuers’ S-1 filings, bringing the proposals closer to regulatory review. Once the SEC acknowledges receipt of these applications, it has up to 240 days to decide on their approval or rejection.
Industry Reactions
Ripple CEO Brad Garlinghouse has responded to the submission of these filings with a simple clock emoji on social media, hinting at the possibility of an imminent regulatory decision. Garlinghouse has consistently expressed optimism regarding the approval of an XRP ETF, reinforcing the belief that these products will eventually gain regulatory clearance.
Growing Institutional Interest in XRP
As noted by CryptoSlate, the recent uptick in ETF applications from various issuers signifies an increasing institutional interest in XRP-related investment opportunities. The proposed XRP ETFs aim to track the price movements of XRP, which currently ranks as the fourth-largest cryptocurrency by market capitalization.
Structure of the Proposed XRP ETFs
Cboe has clarified that authorized participants will not engage in direct transactions of XRP when creating or redeeming the ETF. Instead, the ETF structure is designed to provide exposure to the price movements of XRP without necessitating fund managers to buy or hold the asset directly.
Comparisons with Bitcoin and Ethereum ETFs
The filing also draws parallels to the approval processes for spot Bitcoin and Ethereum ETFs. Cboe noted that although XRP lacks a futures market, the SEC has previously approved Bitcoin and Ethereum ETFs despite the CME futures market for these assets not being considered of “significant size.”
Mitigating Fraud and Market Manipulation Risks
Moreover, the application argues that there are alternative safeguards in place to mitigate risks related to fraud and market manipulation, suggesting that a surveillance-sharing agreement may not be necessary for XRP ETFs. The filing states:
“There are sufficient ‘other means’ of preventing fraud and manipulation that warrant dispensing of the surveillance-sharing agreement with a regulated market of significant size, as was done with both Spot Bitcoin ETPs and Spot ETH ETPs, and that this proposal should be approved.”
As the SEC deliberates these applications, the cryptocurrency community and investors await the potential implications of approved XRP ETFs on the market. For more insights on cryptocurrency regulations and investments, visit our cryptocurrency regulations page.
