Crypto Investment Firm Canary Capital Files for Spot XRP ETF

Crypto investment firm Canary Capital has filed a proposal to launch a spot XRP exchange-traded fund (ETF), becoming the second company within a week to seek approval for an XRP-focused fund.

According to a recent filing with the United States Securities and Exchange Commission (SEC), Canary Capital’s ETF seeks to provide investors with exposure to XRP through a standard brokerage account. This method helps eliminate the complexities and risks of directly holding the cryptocurrency.

ETF Structure and Risk Management

Canary noted that the ETF would track XRP’s value using the Chicago Mercantile Exchange (CME) CF Ripple index, a real-time benchmark for XRP’s price. It also noted that the proposed ETF will not use derivatives to replicate XRP’s performance, as doing so could introduce additional credit and counterparty risks.

The investment firm stated that the ETF’s structure will enable investors to efficiently integrate XRP into their strategic and tactical asset allocations without directly buying, holding, or trading XRP. 

The filing did not specify which institution would serve as the custodian for the fund or the ticker symbol under which the ETF would trade.

Bitwise Files for XRP ETF

Canary’s filing comes a week after Bitwise, another crypto asset manager, submitted its own application for an XRP ETF. These applications are notable as they follow Ripple CEO Brad Garlinghouse’s recent comments about the potential for an XRP ETF, which he described as “inevitable” in the wake of Bitcoin and Ethereum ETFs launching in the U.S.

Despite the progress, securing approval for an XRP ETF might prove challenging, given the SEC’s cautious stance towards  ETFs that track the spot price of crypto assets. For instance, the agency only recently approved spot Bitcoin ETF after a decade. It approved spot Ether ETF in July this year.

Should either Canary Capital or Bitwise receive approval, it would mark the first spot XRP ETF to be cleared by the SEC.

Meanwhile, XRP’s price did not react to the latest filing. At press time, XRP trades at $0.53, representing a mild 1.5% surge in the past 24 hours.