Big News For Ripple: SEC Officially Begins Review of WisdomTree XRP ETF Proposal

The U.S. Securities and Exchange Commission (SEC) has officially started proceedings to determine whether to approve the WisdomTree XRP Fund, a spot XRP-based exchange-traded fund (ETF) proposed for listing on the Cboe BZX Exchange.

If approved, the fund would mark a major milestone, potentially becoming the first XRP-backed ETF in the United States offering investors regulated access to XRP via traditional financial markets.

But first off, let us understand what spot ETFs are.

What Is A Spot ETF?

When we talk about an ETF (Exchange-Traded Fund), think of it as a special kind of investment fund that trades on traditional stock exchanges, just like company stocks (like Apple or Google).

It is a way for investors to gain exposure to a specific asset without directly owning it.

Spot ETF means the fund directly holds the actual underlying asset.

For a Spot Bitcoin ETF, the fund literally holds Bitcoin.

For a Spot Gold ETF, the fund literally holds physical gold.

And in this case, for a Spot XRP ETF, the fund would literally hold actual XRP tokens.

This is fundamentally different from a “Futures ETF“, which doesn’t hold the actual asset. Instead, a Futures ETF invests in contracts that bet on the future price of an asset.

While Futures ETFs provide exposure, they don’t have the same direct link to the real asset’s price movements and sometimes carry different risks and tracking errors.

Unlike futures ETFs that are prone to the risk of positions liquidation, Spot ETFs can only reduce in value as the price is directly tied to the asset.

How We Got Here

The journey began when Cboe BZX Exchange filed a rule change proposal with the SEC on February 6, 2025, to list and trade shares of the WisdomTree XRP Fund under the Commodity-Based Trust Shares framework. The filing was officially published in the Federal Register on February 26, triggering a comment period.

After an extension on March 11, the SEC announced on May 27 that it had formally initiated proceedings to assess the proposal’s compliance with Section 6(b)(5) of the Securities Exchange Act. This section ensures exchange rules are designed to prevent fraud and manipulation and protect public interest.

What The SEC Is Evaluating

The SEC is now seeking public input on whether the proposal sufficiently addresses:

Market manipulation concerns

Investor protection measures

Transparency and pricing benchmarks

Public comments are open for 21 days following publication in the Federal Register, with a 35-day rebuttal period afterward. Submissions must reference file number SR-CboeBZX-2025-019 and can be submitted via the SEC’s website or email.

Fund Structure And What Investors Should Know

The WisdomTree XRP Fund aims to mirror the price performance of XRP, using the CME CF Ripple-Dollar Reference Rate for valuation.

Key Fund Features:

Asset Composition

XRP, cash, and cash equivalents

Creation/Redemption

Shares will be created and redeemed in blocks of 5,000 through cash-only transactions with authorized participants.

No In-Kind Transfers

XRP cannot be deposited or withdrawn directly.

Daily Valuation Timing

Calculated at 4:00 p.m. ET based on market rates

This structure is designed to comply with regulatory requirements while providing secure and efficient access to XRP for institutional and retail investors.

XRP ETF’s Broader Market Impact

If greenlit, the WisdomTree XRP Fund could become a trailblazer for the institutional adoption of XRP in the U.S., offering a legitimate investment vehicle for exposure to the asset.

It would also:

Signal greater regulatory acceptance of XRP

Open the door for similar funds from other issuers

Encourage mainstream portfolio integration of digital assets

Competitors like Grayscale, Bitwise, and Franklin Templeton have also expressed interest in launching XRP ETFs, creating a growing field of potential offerings.

Ripple’s Legal Battle with SEC Continues

This proposal comes amid ongoing legal tensions between Ripple Labs and the SEC, where XRP’s classification as a security has been hotly debated. However, the SEC’s willingness to consider a spot XRP ETF suggests possible softening or evolution in its stance on the token’s status.

What’s Next?

The SEC’s final decision could come months later, following the public comment and rebuttal periods. Industry watchers and investors alike are waiting to see whether the SEC will approve the ETF or issue another delay.

The SEC’s review of the WisdomTree XRP Fund is a significant step toward legitimizing XRP in regulated U.S. financial markets. If successful, it could provide a major boost to institutional interest and market confidence in XRP.

Until then, the public and industry participants are encouraged to share their views as the regulatory process unfolds.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Always do your own research before making investment decisions.