The SEC is currently reviewing XRP holdings in the Grayscale GDLC and Bitwise BITW crypto funds, with public comments due by August 22 and final approval decisions expected soon.
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The SEC has placed a stay on approvals for Grayscale and Bitwise funds containing nearly 6% XRP each.
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Grayscale argues its XRP ETF approval became automatic after the SEC missed the 240-day decision deadline under the Exchange Act.
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Public input is invited before August 22, with market watchers anticipating clarity on XRP-based ETFs by month-end.
SEC reviews XRP holdings in Grayscale and Bitwise crypto funds; public comments open until August 22. Stay informed with COINOTAG’s latest coverage.
SEC’s Ongoing Review of XRP Holdings in Grayscale and Bitwise Crypto Funds
The U.S. Securities and Exchange Commission (SEC) is conducting a detailed review of two crypto funds that include XRP as a significant asset. Both the Grayscale Digital Large Cap (GDLC) Fund and the Bitwise 10 Crypto Index Fund (BITW) hold approximately 6% XRP each. Despite initial approval by the SEC’s Division of Trading and Markets, a stay order has paused their listing on the New York Stock Exchange pending further Commission evaluation.
Grayscale Challenges SEC Stay, Citing Statutory Deadline Under Exchange Act
Grayscale has formally contested the SEC’s stay, asserting that the Commission failed to meet the 240-day statutory deadline mandated by Section 19b of the Securities Exchange Act. Since the SEC did not finalize its decision by July 1, Grayscale claims the fund’s approval should have automatically taken effect. Both Grayscale and the NYSE maintain that the Exchange Act provisions supersede the SEC’s procedural stay, emphasizing the fund’s readiness for market launch.
Update on the situation for Grayscale’s $GDLC and Bitwise’s $BITW. At very least we should have a clearer idea of what’s going on before the end of the month. https://t.co/wVt0NAJUj1
— James Seyffart (@JSeyff) August 1, 2025
Bitwise Crypto Index Fund Also Under SEC Review with Significant XRP Allocation
The SEC has issued a similar review notice for the Bitwise 10 Crypto Index Fund, which holds XRP at 5.9% of its portfolio. This fund includes a diversified mix of ten digital assets such as Bitcoin, Ethereum, Solana, and Litecoin. Like the Grayscale fund, Bitwise’s ETF approval was initially granted by the SEC’s Trading Division but is currently stayed pending further Commission scrutiny.
Public commentary on both funds is open until August 22. Industry analysts expect the SEC to provide clarity on these XRP-inclusive ETFs by the end of the month, potentially marking the first XRP-based exchange-traded products available in the U.S. market.
| Crypto Fund | XRP Allocation | Approval Status |
|---|---|---|
| Grayscale GDLC | 5.99% | Initial approval stayed pending review |
| Bitwise BITW | 5.9% | Initial approval stayed pending review |
What is the SEC’s role in reviewing XRP holdings in crypto ETFs?
The SEC is responsible for regulating and approving exchange-traded funds (ETFs) that hold digital assets like XRP. It ensures these funds comply with securities laws and protect investors. The current review aims to assess whether the XRP holdings in Grayscale and Bitwise funds meet regulatory standards before allowing public trading.
How does the 240-day rule under the Exchange Act affect ETF approvals?
The 240-day rule requires the SEC to approve or deny ETF rule changes within 240 days. If the SEC misses this deadline, the approval may automatically take effect. Grayscale argues this rule supports their claim that their XRP ETF should be listed despite the SEC’s stay, emphasizing statutory compliance over procedural delays.
Frequently Asked Questions
What impact could SEC approval have on XRP ETFs in the U.S.?
Approval would enable the first XRP-based ETFs to trade on U.S. exchanges, increasing investor access and potentially boosting XRP liquidity and market adoption.
Why is the SEC staying the approval of these crypto funds?
The SEC is conducting a thorough review to ensure compliance with securities laws and to address any regulatory concerns before allowing these ETFs to list publicly.
Key Takeaways
- SEC Review: The Commission is actively reviewing XRP holdings in two major crypto funds.
- Approval Stay: Initial approvals by the SEC’s Trading Division are stayed pending further evaluation.
- Public Comments: Input is open until August 22, 2025, with decisions expected soon after.
Conclusion
The SEC’s ongoing review of XRP allocations in Grayscale and Bitwise crypto funds highlights regulatory caution in approving new digital asset ETFs. With public commentary closing soon, market participants await clarity on the potential launch of XRP-based exchange-traded products. COINOTAG will continue to provide timely updates on this evolving regulatory landscape.
