XRP ETFs ‘Inevitable’ After Bitcoin and Ethereum Approvals: Ripple CEO

Ripple boss Brad Garlinghouse is confident that the U.S. Securities and Exchange Commission (SEC) will approve an exchange-traded fund (ETF) for the cryptocurrency his firm’s founders helped create, even if his fintech company has been at loggerheads with the regulator for years. 

Fund manager Bitwise filed for an XRP ETF at the beginning of the month. The fund, if approved, would trade on a stock exchange and give investors exposure to XRP without actually having to hold the cryptocurrency. 

The filing was a surprise because Ripple—whose founders created XRP—has been locked in a legal battle with the SEC since 2020. Even so, Garlinghouse doesn’t appear concerned.

“To me it’s just inevitable [that an XRP ETF will be approved],” Ripple CEO Garlinghouse said in a Bloomberg television interview Wednesday, adding that there’s “demand from institutions and retail to access this asset class.” 

Another asset manager, Canary Capital, also this month filed for an application to launch an XRP-based ETF. 

Garlinghouse said that although the SEC apparently didn’t want to, it ended up approving Bitcoin and Ethereum ETFs—products launched by top Wall Street firms. 

But an XRP ETF might not get immediate approval, given the ongoing dispute with Ripple. Back in 2020, the SEC regulator hit the firm with a $1.3 billion lawsuit, alleging that it sold unregistered securities in the form of XRP.

Last year, Ripple scored a partial court win against the regulator when a judge ruled that programmatic sales of XRP to retail investors did not qualify as securities.

The judge ruled that $728 million worth of contracts for institutional sales did constitute unregistered securities sales, but the news still shocked the industry—and was widely interpreted as a win. 

Following the ruling, the SEC sought a big penalty from Ripple—a $2 billion fine. A New York court then ordered the company to pay a mere $125 million penalty, which was again broadly interpreted as a big win by Ripple and the crypto industry. 

The SEC is currently appealing the judge’s decision. Ripple’s Chief Legal Officer Stuart Alderoty  last week told Decrypt in an interview that he didn’t think the appeal would succeed, and believed the move would “backfire” for the agency.

XRP is the seventh-biggest cryptocurrency by market cap. It is not controlled by Ripple, but the founders of Ripple created XRP—and their company still uses the asset for its money-moving solutions.

XRP is still well below the all-time high of $3.40 it touched back in 2018, according to CoinGecko. Its price currently stands at $0.51, down about 11% over the past month.

Edited by Andrew Hayward