The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has been speculated to be an obstacle to approving an XRP exchange-traded fund (ETF). According to legal expert Jeremy Hogan, the SEC will unlikely approve any XRP ETF filings before resolving its lawsuit against Ripple.
Legal Expert Highlights Regulatory Uncertainty
Jeremy Hogan has indicated that the SEC’s stance on an XRP ETF depends largely on achieving regulatory clarity for XRP. In response to an inquiry from an XRP community member on X, formerly known as Twitter, Hogan stated that the SEC is more likely to settle or dismiss the Ripple lawsuit before taking any action toward approving an XRP ETF.
Regulatory doubt about XRP’s status is speculated to be a significant barrier to the possible approval of financial products using this token.
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However, Hogan emphasized that the lawsuit does not directly impact the approval of an XRP ETF. An XRP ETF approval only requires the court’s decision that XRP does not constitute security as the main step forward.
He pointed out that the remaining part of the lawsuit is regarding Ripple’s programmatic sales of XRP through exchanges, which might affect SEC decisions in various ways.
Analysts Predict XRP ETF Approval Odds at 65%
Meanwhile, Bloomberg ETF analysts Eric Balchunas and James Seyffart have predicted a 65% possibility of an XRP ETF approval this year. Interestingly, the analysts also projected a 90% possibility for a Litecoin ETF approval, a 75% chance for Dogecoin ETF, and a chance of getting a Solana ETF at 70%.
Seyffart reported that the SEC remains silent about all proposed XRP ETFs filed under 19b-4 applications. According to regulations, the U.S. Securities regulator currently does not recognize XRP as a commodity, so its likelihood of approval remains low compared to that of Bitcoin and Ethereum.
Seyffart posted another tweet indicating that the SEC, through its Crypto Task Force under Commissioner Hester Peirce, may attempt to define certain digital assets regarding their commodity or security status by 2025.
XRP ETF regulatory approval possibilities will grow stronger if regulators decide to resolve the security versus commodity classification status for digital assets.
Timeline for ETF Approval Remains Uncertain
Discussions on X regarding the approval timeline for an XRP ETF highlight varying opinions on the process. Ross Morrissey, an XRP community member, questioned the maximum timeline needed to approve an ETF given that the first XRP ETF was filed in October 2024.
Hogan responded that while the initial approval process could be completed within 4 to 6 months, additional steps, such as the approval of the S-1 filing, extend the process further. He suggested a more realistic timeline of eight to twelve months before an XRP ETF could be approved.
Despite growing optimism from some analysts, the ongoing SEC v. Ripple lawsuit remains a critical factor in determining the fate of XRP ETFs. Until the regulatory landscape becomes clearer, the approval of an XRP ETF remains uncertain.
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