The U.S. Securities and Exchange Commission (SEC) announced on April 29 that it will defer its decision on whether to approve the listing and trading of shares of the Franklin XRP Fund, a commodity-based trust tied to XRP, by an additional 45 days, pushing the deadline from May 3 to June 17, 2025. The delay comes as the regulator continues to exercise caution toward cryptocurrency-linked financial products.
Details of the Delay
The proposed rule change was initially submitted by Cboe BZX Exchange on March 13, 2025, seeking to list the ETF under its commodity trust share guidelines. The SEC published the filing for public comment on March 19 but received no feedback during the review period. Under federal securities law, the SEC has up to 90 days to approve, deny, or initiate proceedings to reject such proposals. The 45-day extension indicates the agency needs more time to evaluate the filing’s compliance with investor protection and market stability requirements.
In a parallel move, the SEC also extended its review of Bitwise Asset Management’s application to launch a Dogecoin ETF, delaying that decision to June 15. Both extensions underscore the SEC's cautious approach to cryptocurrencies beyond Bitcoin and Ethereum, which have already received ETF approvals in the U.S. market.
Broader Context and Market Implications
Franklin Templeton, a global investment manager with over $1.5 trillion in assets under management as of early 2025, filed for the XRP ETF in March, signaling growing institutional interest in altcoin-based exchange-traded products. XRP, the native token of Ripple Labs, has faced legal uncertainty since the SEC sued Ripple in 2020 for allegedly conducting an unregistered securities offering. However, a landmark court ruling in 2023 partially clarified that programmatic sales of XRP on exchanges do not constitute securities transactions, paving the way for potential ETF products.
The delay suggests that the SEC may be scrutinizing the custody, liquidity, and market manipulation safeguards specific to XRP, as well as the overall maturity of the ecosystem. With the Trump administration in office, many industry observers believe that these types of funds will eventually receive approval, given the administration’s generally pro-business stance. However, the SEC’s independent regulatory process remains cautious, particularly for altcoins with unresolved legal or technical issues.
Market participants are closely watching the June 17 deadline. Approval could trigger a significant rally in XRP and boost sentiment for other altcoin ETFs, while rejection might lead to short-term volatility and reinforce the SEC's strict stance on non-Bitcoin crypto assets. Major players such as Grayscale, BlackRock, and Fidelity are also pursuing Ethereum and other altcoin ETF products, making the Franklin XRP ETF decision a potential bellwether for the entire sector.
Investors should prepare for either outcome, as the SEC’s ruling will likely influence both price action and the trajectory of crypto regulatory policy in the United States. The extended timeline provides additional opportunity for public stakeholders to submit comments and for the SEC to conduct a thorough analysis of the proposed fund.