REX-Osprey Introduces New ETF Strategy

Investors in Ripple’s XRP are closely anticipating the sanction of the XRP Coin Exchange-Traded Fund (ETF), projected to obtain approval in the coming quarter. Meanwhile, REX-Osprey is proceeding with an indirect listing approach for the XRP Coin ETF, modeled after its initiative with Solana. This process involves contrasting treatments under the Securities Act of 1933 (33 Act) and the Investment Company Act of 1940 (40 Act).

What is the XRP Coin ETF Listing?

REX-Osprey has announced this week that the XRP Coin ETF will be listed and begin trading. Though thrilling news for Ripple enthusiasts, it’s not as straightforward as one might expect. This scheme was first observed with Solana when the Staked Solana ETF started trading in July, under the aegis of Rex Shares and Osprey Funds. The company leverages a significant legislative loophole to its advantage.

How Do ETFs and Trusts Differ?

The Staked Solana ETF (SSK) allocates a major part of its assets to Solana, with a particular stake in SOL. While products developed under the 33 Act lack direct approval and are green-lighted automatically due to no objections, those under the 40 Act need the SEC’s nod. This allows REX-Osprey to implement similar strategies for Solana ETF (SSK) and Ripple ETF (XRPR).

The 33 Act considers the setup under a Trust framework, akin to the Grayscale Bitcoin Trust, which initially launched under Grayscale and later transitioned into an ETF with the SEC’s approval under the 40 Act.

REX-Osprey formulates a product that bypasses direct SEC approval, unless objections arise. They then market this as SSK or XRPR, seemingly complying with the 40 Act, which strategically aligns with investors’ anticipated ETF approvals.

“What we see now are Trust approvals presented as ETFs, creatively exploiting the distinctions between legislative acts for strategic marketing,” an industry observer noted.

The initial positive response for the Solana Trust SSK highlighted the effectiveness of this strategy. However, such financial instruments share the same experiences as conventional crypto trusts, marketed as Spot ETFs.

• REX-Osprey circumvents traditional SEC approval processes through leveraging legislative gaps.
• Investments are indexed but not subject to the typical ETF regulatory framework.
• Products are marketed under established ETF expectations, arousing investor enthusiasm.

As developments proceed, REX-Osprey’s strategy is keenly watched, with investors eager yet cautious of its implications on the landscape of crypto investments. The next quarter may bring significant shifts as more clarity emerges around these innovative listing methodologies.