The SEC has acknowledged and published details of NYSE Arca's proposal to list shares of the Grayscale XRP Trust on Thursday, revealing an extensive framework designed to address regulatory concerns around trading.
The regulator acknowledged that the filing was made in 19b-4, but it is only the first step of what may lead to a review period lasting 240 days after the initial 45-day window, which begins only when the proposal appears on the Federal Register.
It is a sign of the increased interest that crypto ETFs have generated, leading several firms to submit for XRP ETFs They are their own.
“If approved, it would represent a significant validation of XRP as an investable asset, potentially broadening institutional participation and enhancing market liquidity,” Min Jung is an analyst with Presto Research. Decrypt.
Grayscale's 19b-4 You can find out more about this by clicking here. The trust will be distributed in the following ways: “converted” Coinbase Custody Trust Company will serve as the custodian while BNY Mellon will handle administrative duties.
However, unlike previous crypto trust conversions, Grayscale's XRP proposal faces unique challenges, given the ongoing Legal uncertainty Around the asset.
The SEC could give Grayscale’s XRP a push forward if it gives the SEC XRP a push. “signal a more constructive stance toward crypto-based investment products,” Jung noted.
Grayscale is one of the companies that was first to request an XRP exchange traded fund. However, this ETF will be converted if it’s approved.
Its Grayscale XRP Trust is designed to track XRP's price through the CoinDesk XRP Price Index (XRX), calculated at 4:00 p.m. New York time each business day.
The trust will use XRP to source prices and reduce the risk of manipulation. "U.S.-Compliant Trading Platforms" That meet stringent regulatory standards including anti-money-laundering and Know-Your-Customer requirements.
According to the filing, by September 2024, over 97% percent of U.S. dollars-XRP trade volume will be handled on these platforms.
"The Index is designed to limit exposure to trading or price distortion of any individual Digital Asset Trading Platform that experiences periods of unusual activity," In the document, multiple measures are outlined to prevent market manipulation.
The proposal addresses important regulatory issues relating to digital assets.
The fund seeks to offer institutional investors a regulated route while still maintaining a high level of security.
The trust's framework also includes provisions for handling potential blockchain forks and maintaining accurate price discovery across multiple trading venues.
While evaluating this new attempt to increase institutional access to third largest crypto in the world, the regulator seeks public comment on the filing.
Sebastian Sinclair is the editor