Canary Capital Joins Bitwise in Filing for First Spot XRP ETF

Crypto investment firm Canary Capital has filed for a spot XRP ETF with the US Securities and Exchange Commission (SEC), following Bitwise’s lead in powering XRP-based financial products.

In an Oct. 8 filing with the SEC, Canary Capital postulated its ETF would grant investors entrance to the XRP market “via a traditional brokerage account without the potential hindrance to entrance or risks involved in obtaining and holding XRP directly.”.

Canary Capital files for a spot XRP exchange-traded fund with the SEC https://t.co/co0kdaaGeo

— The Block (@TheBlock__) October 8, 2024

Canary said its XRP ETF would track the price of XRP using the Chicago Mercantile Exchange (CME) CF Ripple Index, a real-time price reference product. The Canary Capital Group-managed fund will use CME CF Ripple to track the value of XRP.

This structure permits institutional and retail investors to sink money into XRP through traditional financial markets while decreasing complexities related to custody, safety and regulation.

Canary Capital’s decision to file for an XRP ETF comes seven days after crypto asset manager Bitwise filed for an XRP fund with the SEC on October 2.

While Canary Capital is optimistic about a “progressive regulatory environment,” significant uncertainties still loom. The SEC not long ago filed an application challenging the July 2023 decision that XRP is not a security when traded on secondary exchanges, connecting to the occurring legal battle with Ripple Labs.

This appeal has raised questions about whether the filings of Canary and Bitwise’s XRP ETFs will gain approval amid ongoing regulatory scrutiny.

Steven McClurg, founder of Valkyrie Funds and driving force behind Canary Capital, is confident in the company’s decision despite these challenges. He highlighted the growing demand from institutional and retail investors for access to cryptocurrencies beyond established assets such as Bitcoin and Ethereum.

The ETF will use secure hot and cold wallets to manage XRP and provide an easier way for investors to gain exposure to the token without the complexities of direct crypto management.

Canary Capital spotlights its confidence in the developing crypto market and its possibility further on than Bitcoin and Ethereum.

“We are seeing uplifting signals of a more intensifying regulatory environment along with growing investor demand for advanced approach to cryptocurrencies beyond Bitcoin and Ethereum, particularly investors looking for entrance to firm-level blockchain solutions and their local tokens like XRP,” one canary spokesperson noted.

The SEC’s regulatory crackdown on the cryptocurrency industry continues to impact the status of altcoins like XRP, with many speculating that the agency’s appeal in the Ripple lawsuit could halt any progress on XRP ETF filings.

Although the SEC approved Bitcoin and Ethereum. ETFs and other crypto assets still face regulatory ambiguity. Approval of the XRP ETF, as well as ETFs for other altcoins such as Solana or Dogecoin, remains uncertain under the SEC’s current stance.

It would be the first spot XRP fund that the regulator had approved if the SEC accepted Canary Capital or Bitwise’s applications.

Following a federal judge’s decision in July 2023 that only Ripple’s institutional sales of XRP were unregistered securities offerings, the SEC challenged the lighter fine of $125 million, significantly less than the $2 billion desired by the the SEC.

This move has also stalled progress toward an XRP ETF, with current regulatory uncertainty likely delaying approval until 2025 or later.