SEC opens door to Grayscale’s Dogecoin and XRP ETFs with surprising acknowledgment

The US Securities and Exchange Commission (SEC) has acknowledged Grayscale’s applications for spot Dogecoin (DOGE) and XRP exchange-traded funds (ETFs), according to two Feb. 13 filings by the financial regulator.

This marks the first step in a regulatory review process that could determine whether these funds receive approval.

Both ETFs aim to track the price performance of their respective assets, allowing investors direct exposure to DOGE and XRP through traditional markets.

The SEC’s recognition of these filings indicates a willingness to review and decide on the applications.

Bloomberg ETF analyst Eric Balchunas noted that the agency’s acknowledgment is a positive development. Historically, similar filings for altcoins have faced immediate rejection.

Fox Business journalist Eleanor Terrett further explained that the SEC appears more receptive to considering these crypto ETFs. This marks a shift from December when exchanges withdrew 19b-4 applications for Solana (SOL) after the regulator signaled a lack of engagement.

While the acknowledgment is just the first step in a lengthy approval process, it suggests a growing possibility that these ETFs could reach the market.

Despite this development, regulatory uncertainty remains. Bloomberg ETF analyst James Seyffart recently suggested that the approval of an XRP ETF may depend on the resolution of the SEC’s lawsuit against Ripple.

In 2023, a court ruled that XRP was not a security in secondary sales, but the SEC appealed the decision, prolonging uncertainty.

However, recent leadership changes at the Commission have birthed speculations that it might drop the case following its request for a 60-day suspension in the Binance lawsuit.

Meanwhile, after receiving SEC approval, Hashdex will launch its crypto index exchange-traded product (ETP) on Nasdaq on Feb. 14.

Seyffart reported that the index will initially include Bitcoin and Ethereum, with plans to expand into other assets once regulatory clearance is granted. However, future additions could include Cardano, Avalanche, Litecoin, Chainlink, and Solana, mirroring an existing Hashdex ETF in Brazil.

This illustrates the growing acceptance of crypto-based investment products in traditional financial markets.

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