The Securities and Exchange Commission (SEC) is currently facing a critical decision that could impact the approval of an XRP Exchange-Traded Fund (ETF). The outcome of the SEC’s appeal in the Ripple case may derail Bitwise’s efforts to launch an XRP ETF, as highlighted by Alex Thorn, Head of Research at Galaxy Digital.
The deadline for the SEC to appeal the ruling in the Ripple case is fast approaching on October 7, 2024. While the SEC has not yet made a decision regarding the appeal, Bitwise has taken steps to move forward with its plan for an XRP ETF. The firm submitted an application to establish a trust entity on September 30, laying the groundwork for a potential XRP ETF following the recent launch of Grayscale’s XRP Trust.
Thorn expressed concern that the likelihood of Bitwise’s XRP ETF succeeding would drop significantly if the SEC decides to appeal the court ruling. A former SEC lawyer suggested that the agency is likely to challenge the ruling, as many within the SEC believe it to be flawed and in need of appeal.
The SEC has voiced its dissatisfaction with the court ruling, arguing that it creates an unfair distinction between institutional and retail investors. If the SEC moves forward with an appeal, the legal battle could extend into 2025. However, if the SEC chooses not to challenge the ruling, Ripple may be able to resolve the case by paying penalties.
In light of these developments, Bloomberg ETF analyst Eric Balchunas commented on the potential impact of the upcoming presidential election on XRP ETFs. Balchunas suggested that the likelihood of XRP ETF approval would decrease significantly if Kamala Harris wins the White House, but the future of crypto regulations under a Harris administration remains uncertain.
Harris has demonstrated support for emerging technologies, including crypto, and has emphasized the importance of fostering innovation while protecting consumers. Ripple co-founder Chris Larsen and other industry leaders have endorsed Harris, indicating a potential shift in regulatory approach under her administration.
Thorn acknowledged the possibility of the SEC withdrawing the appeal if Harris wins the election, but he remains skeptical given the agency’s track record. The uncertainty surrounding the outcome of the Ripple case and its implications for XRP ETF approval continues to loom large as the SEC faces a pivotal decision in the coming days.