The cryptocurrency world is closely watching the upcoming deadlines for several XRP Exchange Traded Fund (ETF) applications this October, a situation now complicated by an ongoing U.S. government shutdown. This shutdown has already led the SEC to miss critical deadlines for other spot ETF decisions, fueling speculation about the future of crypto market approvals. The key question revolves around how different regulatory frameworks apply to various ETF types, particularly concerning the need for explicit SEC approval versus automatic effectiveness.
Upcoming XRP ETF Deadlines and the Shutdown's Impact
October is set to be a pivotal month for XRP, with the SEC expected to rule on at least six XRP ETF applications from major financial entities. However, the recent government shutdown has already caused the SEC to miss several deadlines on spot ETF decisions, creating uncertainty. While the duration of the current shutdown remains unpredictable, its immediate effect has been to halt regulatory activity, prompting concern within the XRP community about potential delays for these highly anticipated ETF decisions.
Clarifying ETF Approval Mechanisms
A crucial clarification regarding ETF approvals was provided by crypto reporter Eleanor Terrett, differentiating how various ETFs navigate SEC regulations. She explained that the Teucrium XRP ETF, which holds treasuries, cash, and swap receivables, was registered under the '40 Act. This meant it did not require active SEC approval; instead, it automatically went effective once the statutory period passed, with the SEC's silence indicating compliance. This mechanism is also generally applicable to futures ETFs. However, Terrett emphasized that this differs significantly for spot crypto ETFs, including those for XRP. These are typically registered under the '33 Act as commodity trusts and explicitly demand active SEC approval before they can launch. Therefore, unlike '40 Act-registered funds, spot XRP ETFs cannot simply go effective after a deadline. Consequently, it is speculated that trading for any new spot crypto ETFs, including XRP's, will likely not commence until the government shutdown concludes and the SEC can resume full operations to declare their S-1 filings effective.
