21Shares files S-1 application for an XRP ETF

Asset management company 21Shares has joined the list of firms that have filed applications with the US Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF).

On Nov. 1, 21Shares submitted an S-1 form to register its Core XRP Trust shares for listing on the Cboe BZX Exchange. Coinbase, the largest crypto exchange in the US, would serve as the fund’s custodian.

Earlier this year, 21Shares successfully launched spot Bitcoin and Ethereum ETFs following SEC approval, including its Bitcoin ETF (ARKB), developed in partnership with Ark Invest. ARKB has since attracted $2.6 billion in net inflows, while its Ethereum ETF (CETH) has gained $21.8 million.

Core XRP Trust

The Core XRP Trust operates as a passive investment vehicle. Its goal is to track the price of XRP without attempting to generate additional returns by buying or selling XRP based on market trends. The Trust will not use leverage, derivatives, or similar strategies for its assets.

Instead, it aims to mirror the performance of the CME CF Ripple-Dollar Reference Rate after factoring in expenses and other liabilities. CF Benchmarks Ltd. calculates this benchmark.

21Shares also clarified that the Trust does not offer direct exposure to XRP. Rather than a direct investment in XRP, the Trust allows investors indirect access to XRP’s market through a traditional brokerage account, reducing the barriers and risks typically associated with holding or transferring XRP directly or purchasing it from an XRP spot market.

XRP ETF

Meanwhile, the chances of an XRP ETF approval are slim, considering the SEC has yet to approve any spot XRP ETFs.

This uncertainty stems from the SEC’s ongoing legal battle with Ripple Labs, the company behind XRP. Since 2020, the financial regulator alleged that Ripple raised $1.3 billion through unregistered XRP sales.

However, a 2023 judgment ruled that XRP was not a security when sold programmatically on exchanges, but the case remains under appeal.

Despite the legal hurdles, Ripple CEO Brad Garlinghouse recently expressed optimism that the SEC will eventually approve an XRP ETF, given its recent approvals for Bitcoin and Ethereum ETFs.

Other asset managers, including Canary Capital and Bitwise, are also pursuing approval for their spot XRP ETFs, signaling strong institutional interest in expanding XRP investment options despite regulatory uncertainty.

Mentioned in this article