LUCKNOW (CoinChapter.com) — Ripple’s settlement with the U.S. Securities and Exchange Commission (SEC) could lead to the creation of the first-ever XRP Exchange-Traded Fund (ETF). This comes after a prolonged legal battle, ending with Ripple paying a $125 million penalty.
The conflict started in December 2020 when the SEC accused Ripple of conducting an unregistered securities offering by selling XRP. The legal battle took a significant turn in July 2023 when U.S. District Judge ruled that XRP is not a security when sold to retail investors through exchanges. However, it is classified as a security when sold to institutional investors, resulting in a mixed ruling.
Ripple’s recent settlement reduced its financial penalty from nearly $2 billion to $125 million. This outcome provides Ripple with much-needed regulatory clarity. With this clarity, Ripple can now focus on expanding XRP’s market presence without legal uncertainties. Analysts believe this settlement could be a stepping stone toward the approval of an XRP ETF, similar to the Bitcoin and Ethereum ETFs approved earlier this year.
Could XRP Be the Next Big ETF?
With its legal troubles behind it, Ripple is well-positioned to explore the ETF market. Market analysts are increasingly speculating about the possibility of an XRP ETF. Legal clarity around XRP’s status strengthens this speculation.
Nate Geraci, an ETF analyst, highlighted the importance of regulated futures contracts as a precursor to any altcoin ETF, including XRP. Additionally, crypto commentators MackAttackXRP predict that XRP ETFs could hit the market between mid-2024 and 2025. This development could tap into the $1.2 trillion derivatives market.
Despite the optimistic outlook for an XRP ETF, challenges remain. Rumors suggest that the SEC might appeal the settlement. However, for now, the settlement seems to offer a definitive conclusion to the legal dispute. This allows Ripple to shift its focus toward capitalizing on this regulatory win and advocating for the new ETF.
The SEC settlement has given XRP a level of regulatory clarity that many other cryptocurrencies lack. This clarity could attract more investors who previously avoided XRP due to legal uncertainties. Crypto analyst Doctor Profit noted that XRP is now in a strong position to be considered for an ETF, possibly even ahead of other contenders like Solana.
