SEC Acknowledges Grayscale’s XRP ETF Proposal, Setting Stage for Federal Review

The SEC has acknowledged and published information regarding NYSE Arca’s plan to list stock of the Grayscale XRP Trust on Thursday, revealing an broad model developed to address regulatory issues around trading.

The regulator acknowledged the 19b-4 processing, but it’s only one step in the direction of a 240-day review window, which only begins after the plan is published in the Federal Register after its first 45 days.

This confirmation comes as more people are interested in crypto ETFs, which has prompted some rival companies to apply for their own XRP ETFs.

” If approved, it may indicate a significant confirmation of XRP as an investable property, probably broadening institutional involvement and enhancing business liquidity”, Min Jung, an scientist at Presto Research, told .

Grayscale’s 19b-4 filing outlines how the$ 16.1 million trust would get” converted” and operate as an exchange-traded product, with Coinbase Custody Trust Company serving as custodian and BNY Mellon handling administrative duties.

However, unlike previous bitcoin believe conversion, Grayscale’s XRP proposal faces unique challenges, given the ongoing regulation confusion surrounding the underlying asset.

If the SEC gives Grayscale’s XRP force a shove ahead, this was” indicate a more creative attitude toward crypto-based expense products”, Jung noted.

Although Grayscale was one of the first firms to advocate for an XRP ETF, this one will be a transition if approved.

The CoinDesk XRP Price Index (XRX ), calculated at 4:00 p.m. New York time each business day, serves as the Grayscale XRP Trust.

To mitigate manipulation threats, the trust will cause XRP costs from” U. S. Compliant Trading Platforms” that meet strict regulatory norms, including anti-money fraud and know-your-customer needs.

As of September 2024, these platforms handle over 97 % of U. S. dollar-XRP trading volume, the filing claims.

The filing goes on to list several measures to protect against market manipulation, including” The Index is intended to limit exposure to trading or price distortion of any individual Digital Asset Trading Platform that experiences periods of unusual activity.”

Important regulatory questions relating to digital assets are also addressed in this proposal.

The fund is attempting to provide institutional investors with a regulated path while maintaining a certain degree of operation security by implementing a creation and redemption process where authorized participants deal exclusively in cash rather than directly handling XRP.

The trust’s framework also includes guidelines for handling potential blockchain forks and ensuring timely price discovery across various trading platforms.

While it evaluates this most recent attempt to expand institutional access to the third-largest crypto in the world, the regulator is asking for public feedback on the filing.