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- Crypto experts explained that the 1940 Act allowed the Teucrium XRP ETF to go into effect without direct SEC approval, unlike spot crypto ETFs.
- Spot crypto ETFs, including assets like LTC, SOL, and XRP, remain on hold until the SEC resumes full operations.
The Teucrium XRP ETF went live recently without making much noise in the market despite the US government entering a shutdown last week. As a result, many have a question: while the SEC office is not currently operational, how did Teucrium find its way to the market? Crypto industry expert Eleanor Terret explains the case behind this.
Crypto Expert Explains How Teucrium XRP ETF Differentiates From the Rest
According to crypto expert Eleanor Terrett, not all ETFs require active SEC approval. For instance, the Teucrium XRP ETF, which holds Treasuries, cash, and swap receivables, is registered under the Investment Company Act of 1940 (40 Act).
This allowed it to go effective without direct SEC action. Similarly, futures-based ETFs typically become effective automatically once the statutory review period ends. In a message on the X platform, Terrett wrote:
The Teucrium XRP ETF holds Treasuries, cash, and swap receivables, so it was registered under the 40 Act, meaning the US SEC didn’t need to actively approve it, just let it go effective.
However, spot crypto ETFs, which are registered under the Securities Act of 1933 as commodity trusts, do require explicit SEC approval before launching. This means new spot ETFs for assets like LTC, SOL, and XRP will not begin trading until the SEC declares their filings effective.
This process is likely delayed until after the U.S. government shutdown ends, as reported by CNF.
In a similar development, the Rex-Osprey spot XRP ETF launched last month, marking the first U.S.-approved spot XRP exchange-traded fund (ETF). The U.S. Securities and Exchange Commission (SEC) completed its 75-day review period without raising any objections. This allows the ETF to move forward with its listing under the Investment Company Act of 1940, as mentioned previously.
Large Number of Crypto ETFs Waiting for Approval
Amid the US government shutdown, a large number of crypto ETFs are facing the approval deadline in October. However, with the entire SEC being out of the office, there could be more delays moving ahead.
This development hasn’t deterred the issuers from filing for fresh applications. The U.S. Securities and Exchange Commission (SEC) received over 30 new crypto ETF filings on Friday. REX Shares and Osprey Funds submitted prospectuses for 21 ETFs tracking assets, including SUI, BCH, and HYPE, with several funds incorporating staking features, as reported by CNF.
However, the recent launch of Teucrium XRP ETF hasn’t had much of an impact on the XRP price recently. XRP price continues to trade under $3.0 as of now, while analysts predict higher targets as market sentiment improves.
