SEC Postpones XRP & Dogecoin Spot ETF Decisions

The landscape of cryptocurrency exchange-traded funds (ETFs) in the United States continues to evolve, albeit with notable regulatory caution. While the introduction of spot Bitcoin ETFs has reshaped investment opportunities, the path for similar products tracking other digital assets, often referred to as altcoins, remains subject to intensive review by financial authorities. This ongoing scrutiny is evident in the recent decisions by the U.S. Securities and Exchange Commission (SEC) regarding proposed XRP and Dogecoin spot ETFs.

SEC Postpones Altcoin ETF Decisions

The U.S. Securities and Exchange Commission (SEC) has once again extended its review period for several proposed spot altcoin ETFs, specifically those linked to XRP and Dogecoin (DOGE). Official documents filed on Tuesday confirmed that the regulator requires additional time to evaluate applications for the 21Shares Core XRP Trust, Grayscale XRP Trust, and Grayscale Dogecoin Trust.

This latest deferral is intended to provide the SEC with sufficient opportunity to assess whether these proposals meet the stringent criteria outlined in Section 6(b)(5) of the Exchange Act. This particular section mandates that exchange rules must be designed to prevent fraudulent and manipulative practices and to adequately safeguard investors.

Details of the Proposed Funds

The investment vehicles under consideration aim to be listed on prominent U.S. exchanges. The 21Shares Core XRP Trust and the Grayscale XRP Trust are slated for listing on Cboe, while the Grayscale Dogecoin Trust is proposed for NYSE Arca.

Each fund is designed to track a specific price index to ensure its value accurately reflects the underlying asset. The 21Shares XRP fund intends to follow the CME CF XRP-Dollar Reference Rate. Both Grayscale funds, for XRP and Dogecoin respectively, would track price indices provided by CoinDesk. For the 21Shares XRP Trust, Coinbase Custody is designated as the custodian for the underlying digital assets.

Market Context of XRP and Dogecoin

Dogecoin, widely recognized as the original memecoin, holds a significant position in the cryptocurrency market. As of May 21st, Dogecoin boasted a market capitalization of approximately 33.7 billion dollars, according to CoinGecko. XRP, the native token of the XRP Ledger blockchain network, also represents a substantial portion of the crypto economy, with an estimated market capitalization of 138 billion dollars.

The SEC, in its public statements, has reiterated that initiating formal proceedings for these proposals does not indicate a predetermined outcome. Instead, such procedures are a standard part of the regulatory process, serving to encourage public input and comments on the applications.

Regulatory Delays: A Common Occurrence

Despite a perceived shift towards a more accommodating stance on digital assets by the current U.S. administration, led by President Donald Trump, regulatory processes continue to unfold at their customary pace. Over recent months, the SEC has consistently postponed decisions on various crypto-related ETFs.

According to James Seyffart, an ETF analyst at Bloomberg Intelligence, such delays are a normal part of the regulatory landscape. In a May 20th post on X, Seyffart noted that early approvals for these types of assets are unlikely before late June or early July at the earliest, with a more probable timeline pointing to the beginning of the fourth quarter. He emphasized that the SEC typically utilizes the full legal timeframe available to it for decision-making, regardless of the political climate or the commission’s leadership. “Almost all of these filings have deadlines in October. An early decision would be truly atypical,” Seyffart concluded, underscoring that there isn’t a “conspiracy” behind these standard procedural delays.