SEC Initiates Review Process for Grayscale’s XRP ETF Proposal
February 20, 2025 — The U.S. Securities and Exchange Commission (SEC) has officially begun its review of Grayscale Investments’ proposal for a spot XRP exchange-traded fund (ETF), following the publication of the filing in the Federal Register on Wednesday. The move marks a critical step in the regulatory evaluation process, with the SEC now bound to a structured timeline for reaching a decision.
Grayscale’s XRP ETF application, submitted via NYSE Arca under Rule 8.201-E, seeks approval to list and trade shares of the Grayscale XRP Trust on a regulated exchange. Fox Business journalist Eleanor Terrett emphasized the significance of the Federal Register notice in a social media post, stating:
“Grayscale’s XRP ETF (19b-4 filing) has officially been posted to the Federal Register. All this means is that the clock starts now for the SEC to engage and either approve or deny [the proposal] on or before October 18.”
Structured SEC Timeline
Under the 19b-4 review framework, the SEC has 45 days from the Federal Register publication date to issue an initial decision or extend the evaluation period. If extended, the agency may push the deadline to 90 days, with additional extensions allowing for further 45- and 60-day review periods. The latest possible deadline for a final ruling is October 18, 2025. During this period, the SEC will solicit public feedback, assess market implications, and evaluate compliance with regulatory standards. Historically, the commission has utilized the full timeline before rendering decisions on crypto-related ETFs.
Regulatory Shift Under New Leadership
The SEC’s approach to cryptocurrency products has evolved significantly in recent months. The agency greenlit spot Bitcoin ETFs in January 2024 and approved spot Ethereum ETFs in May 2024, signaling growing openness to digital asset investment vehicles. The departure of former SEC Chair Gary Gensler, known for his stringent stance on crypto, and the appointment of a more industry-friendly successor have further reshaped the regulatory landscape. Under new leadership, the SEC has paused or dismissed multiple enforcement actions against crypto firms, spurring speculation that Ripple Labs’ ongoing legal battle—centered on whether XRP qualifies as a security—could be resolved favorably.
Market Implications and Community Sentiment
Approval of the Grayscale XRP ETF would enable investors to gain exposure to XRP through a regulated exchange-traded product, potentially boosting liquidity and mainstream adoption of the cryptocurrency. The crypto community is closely monitoring the SEC’s deliberations, as the outcome could set a precedent for future digital asset ETFs.
The SEC is expected to open a public comment period imminently, allowing stakeholders to weigh in on the proposal. While optimism surrounds the application due to recent regulatory shifts, analysts caution that the SEC’s historical skepticism toward altcoin-based funds may still pose hurdles.
As the October 18 deadline approaches, the decision will serve as a litmus test for the SEC’s evolving stance on cryptocurrencies and its willingness to expand access to digital asset markets
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