SEC Officially Acknowledges Grayscale XRP, Dogecoin ETF Applications, Begins Review

The US Securities and Exchange Commission (SEC) has officially accepted NYSE Arca's application to list and trade shares of the Grayscale XRP Trust and Grayscale Dogecoin Trust.

The acknowledgement of the applications signals the start of the regulator's review process, which although does not guarantee approval, signals a contrast to its previous reluctant stance that led to withdrawals of such applications.

As part of the review process, the SEC has opened a 21-day public comment period for applications submitted through NYSE Arca, offering an opportunity for market participants to weigh in on the ETFs. The regulator will then decide whether to approve, disapprove or extend its review.

Grayscale XRP Trust's application comes amid the ongoing legal battle between Ripple and the SEC over XRP being classified as a security. Last month, the SEC submitted a filing that challenges a July 2023 court ruling that partially dismissed claims against the company.

The agency also disputes the lower court’s exclusion of non-cash XRP distributions, such as those used for employee compensation and business incentives, from securities regulations. These transactions meet the "investment of money" requirement under the Howey framework, according to the regulator.

NYSE Acra submitted its 19b-4 form with the SEC last month to convert Grayscale's XRP Trust into an ETF. The trust manages $16.1 million in assets. This move is part of Grayscale's broader strategy to convert several of its investment vehicles into ETFs.

Just this week, NYSE Arca filed an application on behalf of Grayscale to launch a Cardano (ADA) spot ETF. If approved, it would be the first ETF linked to Cardano, which is currently the ninth-largest cryptocurrency by market capitalization, at around $25 billion, per Coinmarketcap data. The filing is part of the SEC’s standard review process for new ETFs.