Will The First Spot XRP ETF Launch This Month? SEC Provides Update On Grayscale’s Fund

The U.S. Securities and Exchange Commission (SEC) has issued a statement, calling for comments on its review of the Trading Division’s approval of Grayscale’s Digital Large Cap (GDLC) Fund, which could become the first spot XRP ETF. The altcoin accounts for 5.99% of the fund’s total holdings.

The Commission also called for comments on the Bitwise Crypto Index Fund, which holds 10 assets, including XRP. The SEC has placed a deadline of August 22 for these comments, indicating that it could approve these funds to launch thereafter.

SEC Calls For Comments On Grayscale’s XRP ETF

In a Federal Register Notice, the Commission called for statements on its review of an order approving a proposed rule change that allows the New York Stock Exchange (NYSE) to list and trade shares of the GDLC Fund. The agency made this call pursuant to the Commission Rule of Practice 431.

In line with this, stakeholders have until August 22 to file a statement in support of or in opposition to the approval order for Grayscale’s BTC, ETH, SOL, ADA, and XRP ETF made by the Division of Trading and Markets under delegated authority.

The SEC’s Trading Division had approved the GDLC Fund on July 1, but ordered a stay on the approval pending when the Commission orders otherwise. In the latest notice, the Commission ordered that the stay order is still in place pending further order of the Commission.

Grayscale has already challenged this stay order on its XRP ETF, arguing that the SEC doesn’t have the authority to do so under 19b of the Exchange Act. The asset manager and the NYSE further argued that the Act supersedes the Commission Rules of Practice, which makes the order invalid.

Section 19b of the Exchange Act provides that the SEC has to approve or deny the proposed rule change within 240 days. The rule change is deemed approved if the SEC fails to decide within this period. The 240-day deadline was on July 1, and since the Commission failed to determine, Grayscale argued that it had received automatic approval for the fund.

SEC Also Calls For Comments On Bitwise Multi-Asset Fund

In a separate Federal Register Notice, the SEC also called for comments regarding the Division’s approval order on Bitwise 10 Crypto Index Fund (BITW), which is also classified as an XRP ETF, since the altcoin is one of the assets the fund will track.

Notably, XRP accounts for 5.9% of the fund’s total holdings. BITW also holds Bitcoin, Ethereum, Solana, Cardano, Sui, Chainlink, Avalanche, Litecoin, and Polkadot.

As CoinGape reported, the SEC’s Trading Division had approved NYSE’s proposed rule change to list and trade shares of the BITW. However, similar to the Grayscale incident, the Commission also stayed this approval order pending a review of the decision. The SEC again confirmed in the latest notice that the stay order remains in place pending further order of the Commission.

Following the SEC’s notice on these funds, Bloomberg analyst James Seyffart remarked that there should be a clearer idea of what is going on with the funds before the end of the month. It remains to be seen if the Commission will greenlight these XRP ETFs for launch following the August 22 deadline.

It is worth noting that Bloomberg analyst Eric Balchunas has predicted that the SEC could approve other spot funds that will hold only XRP by September or October.