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The U.S. Securities and Exchange Commission (SEC) has once again delayed its decision on Franklin Templeton’s Spot XRP ETF proposal, prolonging uncertainty for crypto investors seeking exposure to XRP through traditional financial instruments. The announcement, made late Tuesday, underscores the regulator’s persistent concerns over market manipulation and investor protection in the digital asset space.
Franklin Templeton, a global asset manager with more than $1.5 trillion under management, filed its Spot XRP ETF proposal in February 2025. If approved, the product would allow U.S. investors to gain direct exposure to XRP without holding the cryptocurrency itself. Instead, they would access it through an exchange-traded fund listed on a regulated securities exchange.
“This is part of the SEC’s cautious approach to crypto-based ETFs, particularly those tied to assets with a history of volatility and legal scrutiny,” said Joseph Edwards, head of research at Enigma Securities. “The Spot XRP ETF proposal sits at the intersection of investor demand and regulatory hesitation.”
The SEC’s main objection revolves around the potential for manipulation in digital asset markets. XRP, in particular, has experienced both steep price swings and extended legal battles, most notably the regulator’s own lawsuit against Ripple Labs over alleged securities law violations.
“Subsidizing crypto mining risks distorting energy markets,” — IMF spokesperson, in a statement to Independent Urdu.
Although that comment was in the context of energy policy, the SEC’s broader concern mirrors a similar theme: crypto market structures remain fragile, with liquidity and transparency challenges raising questions about whether ETFs tied to these assets can operate without exposing retail investors to outsized risks.
“The SEC wants to see robust surveillance-sharing agreements with crypto exchanges before it can comfortably approve any Spot XRP ETF proposal,” — Eleanor Terrett, journalist at FOX Business, said in a recent interview.
While regulators hesitate, the market has shown confidence. XRP surged above the $3 threshold during the September 9–10 trading session, buoyed by institutional demand and regulatory clarity emerging from Europe. Ripple’s expanded partnership with Spanish bank BBVA, aligned with the European Union’s Markets in Crypto-Assets (MiCA) regulations, has reinforced optimism that banks could adopt blockchain settlement more widely.
“The BBVA deal shows that institutions are preparing to integrate digital assets into mainstream operations,” said Daniel Ivanov, crypto strategist at CoinShares. “For investors, the Spot XRP ETF proposal in the U.S. represents a chance to mirror this momentum, if and when regulators approve it.”
However, analysts warn of potential headwinds. XRP exchange reserves recently climbed to a 12-month high, raising concerns of distribution pressure that could temper near-term price growth. This dynamic highlights the fine balance between institutional optimism and the structural risks that regulators remain cautious about.
The delay is not an isolated case. The SEC has similarly postponed decisions on multiple crypto ETF applications, including those tied to Bitcoin and Ethereum. Each time, the agency has pointed to the need for stronger safeguards before granting approval.
For Franklin Templeton, the delay adds another chapter to its pursuit of bringing mainstream financial exposure to digital assets. For investors, it extends the waiting game as they assess whether U.S. regulators will eventually follow Europe’s lead in approving crypto ETFs more broadly.
Until then, the Spot XRP ETF proposal remains in limbo — a reminder of the gap between investor demand for innovation and the SEC’s responsibility to ensure market integrity.
