Crypto News

Grayscale’s XRP ETF Filing Gains SEC’s Acknowledgment: A Turning Point for Cryptocurrency?

February 14, 2025
Smart Money

SEC Acknowledges Grayscale’s XRP Trust Conversion to ETF

In a notable development for the cryptocurrency market, the U.S. Securities and Exchange Commission (SEC) has officially acknowledged Grayscale Investments’ filing to convert its XRP Trust into an exchange-traded fund (ETF). While this acknowledgment does not guarantee approval, it represents a significant advancement for XRP, a token that has faced ongoing scrutiny and legal challenges.

Implications of SEC’s Acknowledgment

Leading ETF analyst Nate Geraci commented on the implications of the SEC’s acknowledgment, stating that it sends an “enormous message” regarding the future of the XRP token. This positivity from the SEC, although cautious, may pave the way for further considerations regarding the token’s regulatory status.

However, it is important to note that the SEC remains entangled in ongoing litigation with Ripple Labs, the company associated with the XRP token. As of October, the SEC filed an appeal in the case, with the agency outlining its arguments in an opening brief last month. Ripple, for its part, has dismissed the SEC’s lawsuit as mere “noise,” suggesting confidence in their position.

Grayscale’s Journey to ETF Conversion

Grayscale launched its XRP Trust in September 2023, providing accredited investors with an accessible route to invest in XRP, which has been deemed controversial within the regulatory landscape. Following its typical operational strategy, Grayscale filed for conversion of the trust into an ETF in January of this year.

The firm’s history with the SEC has been tumultuous; notably, in 2023, Grayscale sued the SEC over the agency’s refusal to allow its flagship Grayscale Bitcoin Trust (GBTC) to convert into an ETF. The legal battle concluded favorably for Grayscale, which ultimately encouraged the SEC’s subsequent approval of Bitcoin ETFs in January 2024.

Experts Weigh In

Geraci highlighted that the SEC could have opted to reject Grayscale’s filing outright, indicating that the agency’s decision to acknowledge it is a key indicator of potential shifts in regulatory perspectives towards cryptocurrency ETFs.

As the announcement unfolds, investors and analysts alike will be watching closely to gauge the potential outcomes for both Grayscale’s XRP Trust and the broader regulatory environment surrounding cryptocurrency investments.

In conclusion, while the SEC’s acknowledgment of Grayscale’s XRP Trust conversion marks a pivotal moment, the complexities of ongoing litigation with Ripple suggest that the future of XRP and its ETF status remains uncertain and will require continued observation as developments progress.