In summary
- Exchange-traded fund (ETF) issuer 21Shares has filed an S-1 form with the SEC to launch an XRP ETF, seeking to give exposure to US investors.
- If approved, the 21Shares XRP Master Trust will track the price of XRP, the seventh-largest digital currency by market capitalization.
- The SEC is currently in a lawsuit with Ripple, alleging that it sold unregistered securities in the form of XRP, but Ripple has won partial victories in court.
Exchange-traded fund (ETF) issuer 21Shares wants to give US investors exposure to XRP.
The Swiss firm filed an S-1 form with the Securities and Exchange Commission (SEC) on Friday to launch an XRP ETF.
If approved, the 21Shares XRP Master Trust would track the price of the seventh-largest digital currency by market capitalization, through shares that trade throughout the day.
The firm said in a statement that it “remains committed to working to expand US investors’ access to the Cryptocurrency asset class, and we look forward to driving innovation in the US.”
XRP is a digital currency created by the founders of the fintech company Ripple. 21Shares issues ETFs and operates Bitcoin and Ethereum funds in the US following SEC approvals earlier this year.
Other asset managers, including cryptocurrency asset manager Bitwise, hope to launch an ETF that tracks the price of XRP. Asset manager Grayscale also recently launched an XRP Trust and previously converted its similar Bitcoin and Ethereum closed-end funds into suitable ETFs once the SEC approved such products for trading.
However, the SEC is currently embroiled in a multi-year lawsuit with Ripple after suing the company for $1.3 billion, alleging that it sold unregistered securities in the form of XRP.
Last year, Ripple won a partial victory in court against the regulator when a judge ruled that programmatic sales of XRP to retail investors did not qualify as securities. The judge ruled that $728 million worth of contracts for institutional sales did constitute sales of unregistered securities, but the news was still widely seen as a victory for the cryptocurrency industry.
The SEC has since sought a $2 billion fine against Ripple, but a New York court ordered the company to pay only a $125 million fine. The SEC has since appealed, but Ripple appears confident it will prevail again, with the company’s Chief Legal Officer, Stuart Alderoty, recently telling Decrypt that he believes the action will “backfire” on the regulator and benefit the company. cryptocurrency industry in the process.
Despite the ongoing legal dispute, Ripple CEO Brad Garlinghouse said in an interview last week that he believes the SEC’s approval of an XRP ETF is “inevitable” given the regulator’s nod to Bitcoin and Ethereum products.
Edited by Andrew Hayward
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