In summary
- Ripple CEO Brad Garlinghouse is confident that the SEC will approve an ETF for XRP, despite the ongoing legal battle.
- Bitwise and Canary Capital filed applications for XRP ETFs, which would allow investors to gain exposure to XRP without owning the Cryptocurrency.
- Garlinghouse believes that the approval of an XRP ETF is inevitable due to institutional and retail demand for this asset class.
Ripple CEO Brad Garlinghouse is confident that the U.S. Securities and Exchange Commission (SEC) will approve an exchange-traded fund (ETF) for the cryptocurrency his company’s founders helped create, even if his fintech company has been at odds with the regulator for years.
Fund manager Bitwise filed an application for an XRP ETF at the beginning of the month. If approved, it would be traded on an exchange and give investors exposure to XRP without having to actually own the cryptocurrency.
The filing came as a surprise because Ripple—whose founders created XRP—has been in a legal battle with the SEC since 2020. Still, Garlinghouse doesn’t seem worried.
“To me it’s just inevitable (that an XRP ETF will be approved),” Ripple CEO Garlinghouse said in a Bloomberg television interview on Wednesday, adding that there is “demand from institutions and retailers to access this asset class.” “.
Another asset manager, Canary Capital, also filed an application this month to launch an XRP-based ETF.
Garlinghouse said that although the SEC apparently did not want to, it ended up reluctantly approving Bitcoin and Ethereum ETFs launched by major Wall Street firms.
But an XRP ETF might not receive immediate approval, given the ongoing dispute with Ripple. In 2020, regulator SEC sued 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 determined that programmatic sales of XRP to retail investors did not qualify as securities.
The judge ruled that $728 million in institutional sales contracts constituted sales of unregistered securities, but the news still surprised the industry and was widely interpreted as a victory.
Following the ruling, the SEC sought a large fine for Ripple of $2 billion. A New York court then ordered the company to pay a small fine of $125 million, which was again widely interpreted as a major victory for Ripple and the cryptocurrency industry.
The SEC is currently appealing the judge’s decision. Ripple Chief Legal Officer Stuart Alderoty told Decrypt last week in an interview that he did not believe the appeal would be successful, and believed the action would “backfire” for the agency.
XRP is the seventh largest cryptocurrency by market capitalization. Although not controlled by Ripple, the company’s founders created XRP, and use the asset for their money transfer solutions.
XRP is still well below the all-time high of $3.40 it reached in 2018, according to CoinGecko. Its current price is $0.51, after experiencing a drop of approximately 11% in the last month.
Edited by Andrew Hayward
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