The U.S. Securities and Exchange Commission (SEC) has rejected WisdomTree’s highly anticipated spot XRP ETF application. The proposed fund, which was to be listed on the Cboe BZX Exchange with the Bank of New York Mellon as its administrator, has failed to meet the stringent requirements set by the regulatory body.

Why Did the SEC Reject It?

The SEC cited three key concerns:

1. Market Manipulation Risks: The lack of sufficient safeguards against market manipulation in the XRP market was a major sticking point.

2. Investor Protection: Regulatory bodies remain unconvinced that investors would be adequately protected from potential fraud or volatility.

3. Surveillance Mechanisms: The absence of robust monitoring systems to oversee XRP-related trading activities further fueled their decision.

These reasons are consistent with the SEC’s previous denials of spot ETFs for Bitcoin and Ethereum, signaling the agency’s cautious approach toward crypto.

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Why an XRP Spot ETF Could Shake the Market

Approval of a spot XRP ETF would have been a game-changer but could also introduce risks:

🔹 Systemic Market Impact: Institutional participation might lead to speculative trading, impacting not just XRP but also Bitcoin and Ethereum.

🔹 Market Volatility: Analysts warn that sudden influxes of institutional liquidity could destabilize existing markets, triggering crashes.

🔹 Regulatory Confusion: Approving XRP while rejecting Bitcoin and Ethereum ETFs would raise questions about fairness and consistency.

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Strategic Delay or Regulatory Priority?

Critics argue that the SEC’s persistent rejections serve a broader strategy to curb premature institutional entry while refining guidelines for crypto ETFs. For XRP and other cryptocurrencies, this decision highlights the uphill battle to gain mainstream financial approval.

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Market Reactions

🔻 XRP: $2.551 (-5.92%)

🔻 BTC: $95,748.01 (-1.43%)

🔻 ETH: $3,577.24 (-2.5%)

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Stay tuned for updates as the crypto community reacts to this monumental decision.

🔗 #XRP #ETHOnTheRise #XRPTrends #BitwiseFiles10ETFs #Write2Earn!