Galaxy Digital Research Director

By Crypto Gloom On Oct 2, 2024

Key Takeaways

The SEC’s appeal of the Ripple case could hinder the approval of the XRP ETF.
Investor interest in the XRP ETF will likely depend on the SEC’s regulatory decision.

Bitwise’s XRP ETF bid is unlikely to succeed if the SEC appeals the Ripple ruling that found XRP sales to retail investors are not securities, according to Alex Thorn, head of research at Galaxy Digital.

SEC Deadlines The appeal of the ruling against Ripple is scheduled for October 7, 2024. The agency has yet to decide whether to appeal, but Bitwise has moved forward with its plans for an XRP ETF.

As confirmed by Bitwise Chief Investment Officer (CIO) Matthew Hougan, the company officially submitted its application to launch the Bitwise XRP ETF on September 30. submit documents Since the last launch of Grayscale’s XRP Trust month.

“The SEC has until next week (October 7) to appeal Judge Torres’ July 2023 ruling that secondary sales of XRP through exchanges are not securities,” Thorn said. “The chances of this ETF application being successful drop to almost zero if appealed.”

According to FOX Business journalist Eleanor Terrett, a former SEC lawyer said the SEC would not accept the court ruling because “everyone out there (at the SEC) truly believes that the decision was wrong, that it was not good law, and that it should be followed by the law.” He said he would “probably” object. “I appealed.”

The SEC expressed dissatisfaction with the ruling, calling it a “bad decision” in a filing as part of its lawsuit against Terraform Labs. The agency said the court’s decision creates an unfair distinction between institutional and individual investors.

If the SEC pursues an appeal, the lawsuit is expected to extend until 2025. However, if the SEC had not objected to the court ruling, Ripple could have ended the legal battle after paying the penalty.

In response to Thorn’s statement, Bloomberg ETF analyst Eric Balchunas said that the XRP ETF would be dissolved if Kamala Harris wins the White House.

If Harris wins, it’s close to zero. I agree. On this front IMO anything is possible with a Trump win.

— Eric Balchunas (@EricBalchunas) October 1, 2024

However, since it is still unclear how the Harris administration will handle cryptocurrency regulation, an outright rejection may not be justified.

Harris has publicly expressed support for emerging technologies, including cryptocurrency, demonstrating her commitment to protecting consumers while promoting innovation. Ripple co-founder Chris Larsen is one of the prominent industry figures to express support for Harris.

“The SEC has appealed, but if Harris wins, I think there is a possibility that the SEC will ultimately withdraw its appeal,” Thorn added. “Still, I’ll be shocked if they don’t appeal by next Tuesday.”