Crypto investment company Canary Capital has just submitted a proposal to the SEC to launch a spot XRP exchange-traded fund (ETF), marking the second attempt to introduce an XRP ETF within a week after Bitwise.
According to a filing on Oct. 8, the ETF would allow investors to gain exposure to XRP through a regular brokerage account, eliminating the need to purchase and hold the crypto directly, which can come with certain challenges and risks.
Canary announced that its XRP ETF will follow the price of XRP using the Chicago Mercantile Exchange (CME) CF Ripple index, a tool that provides real-time price updates. The fund will avoid using derivatives to track XRP’s value, noting that doing so could expose the ETF to extra risks, like credit and counterparty issues.
[Canary Capital] believes that the design of the Trust will enable certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies that use XRP by investing in the Shares rather than purchasing, holding, and trading XRP directly.
Navigating XRP ETF approval challenges
Canary Capital hasn’t shared who will serve as the custodian for its XRP ETF or what the ticker symbol will be. Moreover, their filing for an XRP ETF comes just a week after a crypto asset manager, Bitwise, submitted an XRP fund application to the SEC on Oct. 2. XRP is currently trading at $0.53, showing a small 0.4% gain today while remaining steady over the past week.
If the SEC approves applications from Canary Capital or Bitwise, it would mark the first time a spot XRP fund gets the green light from the regulator. However, there are still major barriers to getting approval, especially with the SEC appealing its lawsuit against Ripple, the company behind XRP. Additionally, the SEC argues that XRP is an unregistered security and claims Ripple raised $1.3 billion by offering the token.
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