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- Grayscale has moved to convert its XRP Trust into an ETP to boost its exposure.
- This move is considered a move to validate the regulatory clarity of the coin.
On Thursday, asset manager Grayscale Investments submitted a proposal to the SEC to convert its XRP Trust to an Exchange-Traded Product (ETP). This move marks a step towards regulatory clarity in the United States’ crypto landscape.
Grayscale Enters the XRP ETF Scene
The Grayscale 19b-4 filing submitted to the US Securities and Exchange Commission (SEC) seeks to offer investors regulated means to invest in XRP. With approximately $16 million in assets under management, the Grayscale Trust is one of the largest XRP investment funds globally.
By converting the XRP Trust to an ETP, Grayscale seeks to expose investors to the coin, eliminating the cost and difficulty of direct purchase.
Typically, ETFs are offered at lower minimum prices and management fees than trusts. Thus, Grayscale’s ETP is anticipated to see increased institutional acceptance. Moreover, institutions like banks and pensions, which are not allowed to participate in Trusts, may do so in the ETP.
According to the filing, BNY Mellon and Digital Currency Group are among the entities involved in the proposed XRP ETP. BNY Mellon, a prominent investment bank, will serve as the administrator and transfer agent of the Trust.
Additionally, Foreside Fund Services will stand as the marketing agent for the Trust, while CoinDesk Indices will calculate pricing.
The Sponsors anticipate that the Shares will fluctuate in response to XRP market prices. Also, the number of XRP represented by a Share will decrease as the Trust’s expenses are paid with its XRP.
Grayscale’s decision to convert its XRP Trust into an ETP follows recent ETF filings from other asset managers. So far, six asset management firms have submitted applications for XRP-linked ETFs, as featured in CNF’s recent coverage.
These firms include Canary Capital, WisdomTree, Bitwise, 21Shares, CoinShares, and Tuttle Capital Management.
XRP Moves Closer to Regulatory Clarity in the US
Grayscle’s potential ETP launch is a great step for XRP in gaining more regulatory clarity in the US. This is especially important considering Ripple’s long-standing legal battle with the US SEC.
The regulator filed the case against Ripple and two executives, Brad Garlinghouse and Christian A. Larsen, in December 2020. The SEC accused them of selling $1.3 billion XRP in unregistered securities offerings.
The appeals process remains ongoing in the Second Circuit Court of Appeals as of January 2025. The timing for a ruling is unpredictable, and legal experts believe the lawsuit could last until later this year.
However, there were reports that the SEC has taken down information about the lawsuit against Ripple from its website. Commenting on the reports, Attorney Jeremy Hogan said the court does not care what the SEC does on its website, suggesting that the case is still on.
Nonetheless, many XRP community members believe the case will conclude soon, given the emergence of a pro-crypto government under President Donald Trump. Meanwhile, Garlinghouse recently confirmed discussions with Trump about adding XRP to the US strategic reserves.
