In a significant development, Franklin Templeton, an asset manager overseeing more than $1.5 trillion in assets, has thrown its hat into the ring to launch an XRP ETF in the U.S. The Crypto Basic initially reported this development on its official X handle. On March 11, the asset manager submitted an S-1 registration with the U.S. SEC. This move comes after the company’s earlier registration of an XRP Trust in Delaware.
The Franklin XRP Trust, much like the filings from other asset managers, will be tracking the price performance of XRP, offering investors an indirect exposure to the underlying asset. As part of the structuring, the fund has been formed as a Delaware Statutory Trust, with Coinbase Custody selected as the custodian of the fund’s XRP assets. In terms of operation, CSC Delaware Trust Company will serve as the sole trustee of the fund, with an unnamed entity managing the XRP Trust’s cash holdings. The same entity will also serve as the transfer agent and administrator of the fund.
In a noteworthy disclosure, Franklin Templeton revealed that shares of its XRP Trust would be listed and traded on the Cboe BZX exchange. This platform has also been chosen by other potential issuers, such as WisdomTree, Canary Capital, and 21Shares, for trading shares of their XRP ETFs.
The move by Franklin Templeton elicited responses from several key stakeholders in the crypto industry. Ripple CEO Brad Garlinghouse expressed his delight at the development with an eye emoji, drawing the XRP community’s attention to the news.
Following the submission of the S-1 application for the XRP ETF by Franklin Templeton, Cboe will need to file a 19b-4 with the SEC, indicating its interest in listing shares of the fund. Like other potential XRP ETF issuers, Franklin will wait for the SEC to acknowledge the exchange application of its XRP ETF.
The SEC will have a 240-day window to decide whether to approve or deny the launch of the Franklin XRP Trust. Many industry experts predict that the SEC will acknowledge the filing, as it has done with other similar filings.
Interestingly, filings for XRP ETFs continue to emerge, despite the ongoing SEC v. Ripple lawsuit. The case is currently pending in the Court of Appeals for the Second Circuit. The current SEC leadership has paused and dismissed other crypto-related lawsuits but has not yet made an official decision regarding the Ripple case.
According to legal experts, the delay might be due to negotiations by Garlinghouse to overturn the trial court’s decision that its XRP institutional sales constitute investment contracts. This previous finding resulted in a $125 million fine against the company and an injunction against its future XRP sales to institutional clients. Overturning this decision would allow Ripple to continue selling XRP to institutional clients and possibly put an end to the regulatory uncertainty surrounding the coin.
