Investment asset management Bitwise chose to pursue an XRP ETF product at a very odd time. The firm recently filed an S-1 registration with the United States Securities and Exchange Commission (SEC). With this filing, there are already speculations amongst experts on what the future holds for this filing. Many are speculating that the regulator may block the filing, a stance gleaned from the recent development between the SEC and Ripple Labs Inc.
Bitwise XRP ETF Approval Is Uncertain
About a year ago, Judge Analisa Torres ruled in Ripple vs SEC case that XRP is not security. By this verdict, the Judge handed the San Francisco-based firm a partial victory. The regulator also secured a win as Judge Torres ruled that Ripple violated securities laws when it sold XRP to institutional investors without registration.
For this violation, Ripple was ordered by the same judge to pay $125 million penalty in the SEC lawsuit two months ago. At first, both parties did not signal any intent to appeal the verdict, but experts foresaw appeals.
The window for appeal was kept open but scheduled to expire by October 7, 2024. Eventually, the SEC filed a Notice of Appeal to challenge the XRP’s securities status on October 2. This filing has changed different narratives, including for Bitwise’s XRP ETF ambition.
In the long run, if this appeal favors the SEC, Bitwise may have to walk away from its newly filed XRP ETF. This is because a win for the Commission on this matter will mean that XRP is security, as it has always argued under Gary Gensler’s leadership.
This uncertainty might change the trajectory as commodities have a higher chance of securing ETF approvals.
Appeals Court Commentary on Past US SEC Cases
A post from Ripple CLO Stuart Alderoty suggests that Bitwise may not have to worry about SEC winning the appeal. The Ripple executive is very confident that SEC may face disgrace one more time at the Court of Appeals.
He took to X to share some of the responses that the regulator has received from the court in the past.
Alderoty cited the SEC’s appeal in its case with Aron Govil of Jacksonville, Florida. On getting to court, some of the responses handed out include “We do not agree with the SEC,” “We are not persuaded,” by the SEC’s arguments and “The SEC’s counterarguments are unavailing.”
Attorney Fred Rispoli thinks it will be a long wait for the XRP ETF, but he also thinks it will go the same way Grayscale BTC ETF applications ended. This mean that no matter how long the delay last, the SEC will eventually approve the offering.
Read More: Bitwise Files For Another ETF Following XRP ETF Filing
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