SEC Delays XRP and Dogecoin ETF Approvals: When Will They Get the Green Light?

The U.S. SEC has announced a delay in its decision-making process regarding the approval of ETFs tied to XRP and Dogecoin. This move reflects the regulatory agency's cautious approach towards digital asset-related financial products and its commitment to ensuring compliance with investor protection standards.

Details of the Delay

The SEC has extended the review period for the 21Shares Core XRP Trust, the Grayscale XRP Trust, and the Grayscale Dogecoin Trust. The agency cited the need to assess whether these proposals meet the requirements of Section 6(b)(5) of the Exchange Act, which includes provisions to prevent fraud and protect investors.

According to the filings, the 21Shares Core XRP Trust aims to track the CME CF XRP-Dollar Reference Rate, while the Grayscale Dogecoin Trust and Grayscale XRP Trust will follow CoinDesk's respective price indices. All three ETFs plan to issue shares in 10,000-share blocks and hold only their respective digital assets.

The SEC has also invited public comments on these proposals, emphasizing that the initiation of proceedings does not imply any conclusions regarding their approval. This step is seen as part of the SEC's broader effort to engage stakeholders and thoroughly evaluate the implications of such financial products.

In addition to 21Shares’ XRP offering, the SEC gave the same treatment to a Dogecoin product from Grayscale.

Before that, the Commission announced similar delays for five different Solana ETF applications, adding to the disappointment. The ETF market is booming, and the SEC is currently under more pro-crypto leadership.

Market and Expert Reactions

Bloomberg ETF analyst James Seyffart commented that delays in crypto ETF decisions are routine, and early approvals are unlikely. He stated, "If we're gonna see early approvals from the SEC on any of these assets, I wouldn’t expect to see them until late June or early July at the absolute earliest. More likely to be in early Q4." This sentiment underscores the SEC's deliberate pace in addressing the complexities of crypto-related financial instruments.

Despite the delays, the market response to the news has been relatively muted. XRP and Dogecoin prices have shown resilience, with XRP trading at $2.355 (up 1.66%) and Dogecoin at $0.2264 (up 0.75%) as of the latest data from CoinMarketCap. This stability suggests that investors remain optimistic about the eventual approval of these ETFs.

Broader Implications and Future Outlook

The SEC's cautious approach comes amid a surge in interest and applications for crypto ETFs. In addition to XRP and Dogecoin, the agency has postponed decisions on several other altcoin ETFs, reflecting the growing demand for institutional-grade crypto investment products. This trend underscores the increasing mainstream appeal of digital assets as investment vehicles.

However, the delay also highlights the challenges faced by regulators in balancing innovation with investor protection. While the SEC, under its current leadership, has demonstrated a more pro-crypto stance, it continues to exercise caution in approving new financial products tied to digital assets. This measured approach aims to ensure that such products align with regulatory standards and safeguard investors.

The next key date for these ETF proposals is June 17, when the SEC is expected to revisit its decision on the XRP ETF. In any event, it looks like the XRP ETF and all other novel altcoin filings should be prepared for a long wait.