Canary Capital joins the XRP ETF race, following Bitwise. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
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Key Takeaways
Canary Capital is now the second asset manager to file an S-1 for an XRP ETF.
Canary’s filing follows Bitwise.
The SEC has up to 240 days to decide on the filing.
Crypto investment firm Canary Capital has become the latest asset manager to file for a spot Ripple (XRP) exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC).
The filing comes within a week of Bitwise’s S-1 filing.
Canary Capital Joins Bitwise
Canary XRP ETF applications. Source: SEC
The Canary XRP ETF will track XRP’s value using the CME CF Ripple dollar reference rate, a once-a-day benchmark index price for Ripple.
The index aggregates trade data from multiple Ripple-USD markets operated by major crypto exchanges.
“We’re seeing encouraging signs of a more progressive regulatory environment coupled with growing demand from investors for sophisticated access to cryptocurrencies beyond Bitcoin and Ethereum—specifically investors seeking access to enterprise-grade blockchain solutions and their native tokens such as XRP,” a spokesperson for Canary told Fox Business.
SEC has Until June 2025 to Respond
The SEC has 30 days to comment on Canary Capital’s filing and up to 240 days to render a final decision.
This review process typically includes an initial 45-day review, which can be extended if the SEC requests additional information or postpones its decision.
Assuming the review process unfolds normally, the SEC could issue a final ruling on the ETF by June 2025.
However, the agency’s decision will likely hinge on the outcome of its ongoing lawsuit against Ripple, which centers on the sale of XRP. This legal uncertainty has drawn parallels to the regulatory fate of Ether (ETH) ETFs.
The SEC’s ultimate decision will likely depend on how it resolves the legal status of XRP, leaving investors wondering when—or if—they will gain access to these investment products.
XRP’s Path to SEC Approval Uncertain but Promising
For XRP to secure approval for a spot exchange-traded fund (ETF), it must follow in the footsteps of Ethereum, which recently won regulatory clearance.
The SEC only approves spot ETFs for commodities, not securities, so Ripple must convince the agency that it falls into the former category.
Until recently, Bitcoin was the only asset the SEC deemed a commodity; however, that changed in July when the agency approved Spot ETH ETFs, effectively recognizing Ether as a non-security.
Ether’s path to regulatory clarity provides a promising parallel for XRP.
The SEC had investigated Ethereum and Consensys for alleged securities violations but ultimately dropped the investigation.
Ripple has faced a similar lawsuit from the SEC since December 2020. The agency alleged that XRP sales constituted securities violations.
In July 2023, a judge ruled that secondary XRP sales to retail customers did not violate securities laws, bringing relief to XRP holders.
The SEC has appealed the ruling, and the fate of the XRP ETF now hangs in the balance. Nevertheless, Ripple’s top brass is confident that the SEC will eventually agree to settle or risk defeat in court.
Additionally, in a significant shift, the SEC has also reevaluated its stance on crypto security status. In an amended complaint filed in the Binance lawsuit, the agency acknowledged misusing the term “crypto asset securities” and expressed regret for the resulting confusion.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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