The U.S. Securities and Exchange Commission (SEC) officially started its review process of the WisdomTree XRP ETF, which signals a major development for the cryptocurrency market. The SEC’s approval process for the WisdomTree XRP ETF propels the launch of a spot XRP ETF in the United States, which boosts investor confidence and pushes XRP prices higher. The Cboe BZX Exchange submitted a proposal that represents a crucial advancement for institutional access to digital assets.
After earlier extensions and public comment periods, the SEC begins its formal review phase to examine the proposal according to rigorous legal and regulatory standards that focus on preventing market manipulation and protecting investors. The Commission now operates within a vital 240-day decision frame while simultaneously requesting public feedback about the ETF’s framework and protective measures. The progression of this matter occurs during broader initiatives to develop more defined regulatory standards for digital assets such as XRP.
Inside the SEC’s Crucial XRP ETF Assessment
The agency started formal evaluation of the SEC XRP ETF proposal on May 27. The decision to initiate proceedings comes after a March 11 determination to prolong the evaluation phase, which demonstrates the comprehensive nature of their regulatory review process. The Commission evaluates whether the proposal complies with Section 6(b)(5) of the Exchange Act, which requires exchange rules to deter fraudulent and manipulative acts and practices.
The Commission has requested public input for a proposal that Cboe BZX Exchange initially submitted on February 6 and later appeared in the Federal Register on February 26. Interested parties have two weeks and ten days from the publication date to submit their initial comments, followed by a thirty-five-day period for rebuttals. The SEC’s notice, Release No. Release No. 34-103124 solicits feedback regarding investor protection and market manipulation procedures while referencing file number SR-CboeBZX-2025-019.
Decoding the Proposed WisdomTree XRP ETF
The proposed WisdomTree XRP ETF will enable investors to gain exposure to XRP through performance tracking of the CME CF Ripple-Dollar Reference Rate. The filing specifies that the fund’s assets will be limited to cash holdings as well as XRP and cash equivalents to facilitate cash-settled share creation and redemption. The ETF will create and redeem shares in 5,000 unit blocks and perform daily valuations at 4:00 p.m. ET, aligning with standard pricing benchmarks.
The fund uses a cash-settled mechanism, which prevents direct in-kind XRP creation and redemption processes. The approval of this ETF would establish the first U.S.-based spot XRP investment vehicle, which would enable investors to gain direct exposure to the cryptocurrency without needing to handle crypto wallets or private keys. Apart from WisdomTree, major issuers such as Bitwise, Grayscale, and Franklin Templeton have pursued the development of comparable XRP ETFs.
Navigating XRP ETF Regulatory Hurdles and Clarity
The evaluation of the WisdomTree XRP ETF reflects current regulatory discussions regarding the classification of digital assets. XRP is not a security, according to Ripple’s Chief Legal Officer, Stuart Alderoty, who recently wrote to the SEC Crypto Task Force to urge for clearer regulatory guidelines. He maintained that unclear regulatory definitions generate confusion among both market participants and issuers.
The Ripple lawsuit’s resolution in March accelerated development momentum by providing substantial regulatory clarity for XRP and reportedly enabling institutional adoption. The enhanced regulatory environment led to the introduction of the first XRP futures ETF at CME, while the push for a spot XRP ETF continues. A 240-day decision window has created a situation where market participants watch closely while traders maintain a positive outlook due to expectations of a major regulatory advancement.
The Future of XRP: Institutional Integration and ETFs
The SEC’s move to advance the WisdomTree XRP ETF proposal marks a critical development for embedding XRP more firmly within the mainstream financial sector. The Commission has demonstrated its dedication to making sure all new financial products meet legal and regulatory requirements while putting investor protection and market integrity first. A thorough examination of the ETF’s framework, along with its associated risks and advantages, maintains its critical importance.
The SEC XRP ETF’s approval would enhance institutional interest in Ripple while establishing a standard for upcoming crypto investment products in the United States. The active public comment period combined with the SEC’s detailed examination illustrates the evolving nature of digital asset regulation. The Commission’s impending decision stands as a pivotal moment that will determine XRP’s future and influence the entire crypto ETF market.
