Canary Capital Seeks SEC Approval for Groundbreaking XRP ETF
Canary Capital Group LLC has taken a significant step toward simplifying crypto investments by submitting a registration with the U.S. Securities and Exchange Commission (SEC) for its proposed Canary XRP ETF. This exchange-traded fund (ETF) aims to provide investors with exposure to XRP, offering a more accessible option for those hesitant to directly hold the digital asset. By allowing access through traditional brokerage platforms, Canary’s initiative could bring XRP to a broader audience.
Bringing XRP to Traditional Investors
The proposed Canary XRP ETF will operate as an exchange-traded product (ETP) with shares tracking the value of XRP, a digital asset built on the XRP Ledger. According to the SEC filing, the fund’s main goal is to provide exposure to XRP’s value while managing operational costs. The pricing benchmark will be established through the CME CF Ripple-Dollar Reference Rate – New York Variant, which pulls data from major XRP trading platforms.
Fox Business reporter Eleanor Terrett first broke the news, highlighting that Canary is a newcomer in the crypto investment space. The firm was launched by Steven McClurg, the founder of Valkyrie Funds. A Canary spokesperson told Fox Business, “We’re seeing encouraging signs of a more progressive regulatory environment and growing demand for access to cryptocurrencies beyond Bitcoin and Ethereum, including tokens like XRP.”
How the ETF Will Work
The Canary XRP ETF differs from standard mutual funds and investment companies. It will not be subject to the Investment Company Act of 1940, and Canary Capital Group won’t serve as an investment adviser under the Investment Advisers Act. Instead, the trust will act as a digital asset trust, with shares created and redeemed in baskets. This ensures liquidity through authorized financial participants, allowing investors to gain exposure to XRP without directly trading or holding the asset themselves.
Regulatory Challenges and Future Outlook
The ETF’s filing is a bold move to make XRP more accessible to traditional investors. However, Canary Capital acknowledges the risks tied to digital assets, including market volatility and regulatory uncertainty. With ongoing changes in the regulatory environment, it remains unclear whether the SEC will approve the fund.
Canary isn’t the first to pursue an XRP ETF. Bitwise, another major player in the digital asset space, also recently filed for a similar product. If approved, these ETFs could lead to greater adoption of XRP and expand the cryptocurrency’s presence in traditional financial markets.
This filing represents a crucial step forward in bridging the gap between traditional finance and the crypto world.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. The views expressed are those of the author and not necessarily those of CryptoInsider. Readers are encouraged to conduct their own research before making any financial decisions.
