The ongoing XRP lawsuit has dominated headlines in the crypto space, sparking intense debate over its potential impact on the approval of an XRP exchange-traded fund (ETF). While many investors have speculated that the Ripple vs. SEC legal battle could delay or derail regulatory clearance for an XRP ETF, leading legal experts are now offering clarity—suggesting the two developments are not as closely linked as once assumed.
Recent filings and expert commentary indicate that the path toward an XRP ETF may be clearer than expected, even with the lawsuit still active. As institutional interest grows and regulatory processes advance, market sentiment is shifting from uncertainty to cautious optimism.
Why the XRP Lawsuit Won’t Block ETF Approval
A key misconception among investors is that the outcome of the Ripple vs. SEC case must precede any decision on an XRP ETF. However, legal analyst Jeremy Hogan, a prominent voice in the pro-XRP community, has clarified this assumption.
In response to a public inquiry on social media, Hogan stated that while he expects a settlement in the Ripple-SEC case before an ETF approval occurs, the two events are not legally dependent on one another. His reasoning? ETF approvals involve a separate and often lengthier regulatory timeline involving S-1 filings, public comment periods, and compliance reviews—all of which typically take 8 to 12 months, regardless of parallel litigation.
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Hogan emphasized that the core legal question—whether XRP itself qualifies as a security—has already been partially resolved. In a landmark ruling in 2023, Judge Analisa Torres determined that XRP is not inherently a security when sold to retail investors or used in secondary markets. This distinction significantly weakens the argument that the ongoing lawsuit should act as a roadblock to ETF approval.
No Legal Barrier to XRP ETF from the SEC
Despite the persistence of the Ripple-SEC lawsuit, there is no statutory or procedural barrier preventing the U.S. Securities and Exchange Commission (SEC) from approving an XRP ETF. The current litigation focuses narrowly on Ripple’s past institutional sales of XRP—not on the token’s classification in broader markets.
This precedent is not without historical context. The SEC has previously allowed ETFs for assets under regulatory scrutiny. For example, Bitcoin futures ETFs were approved even while debates over Bitcoin’s regulatory status continued. Similarly, Ethereum is still navigating uncertain classification, yet multiple spot Ethereum ETFs have advanced through the approval pipeline.
Legal experts argue that if the SEC can evaluate Bitcoin and Ethereum ETFs based on market maturity, liquidity, and investor protection measures, it can apply the same framework to XRP—especially given its established trading volume and presence on major exchanges.
Nasdaq’s Move Signals Institutional Confidence
Market momentum has picked up significantly following Nasdaq’s formal submission of a 19b-4 filing with the SEC to list CoinShares’ proposed XRP and Litecoin ETFs. This filing is a critical step in the listing process, signaling that major financial institutions are preparing infrastructure for potential approval.
The proposed ETFs would operate under Nasdaq’s Commodity-Based Trust Shares rule, aligning them with other digital asset trusts. This move follows CoinShares’ earlier submission of an S-1 registration statement, which details the fund’s structure, objectives, and risk factors—another mandatory prerequisite.
These coordinated filings reflect growing institutional confidence in XRP’s long-term viability. They also suggest that asset managers are positioning themselves to launch products quickly once regulatory greenlights are issued.
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What Analysts Say About XRP ETF Approval Odds
Bloomberg Intelligence analysts James Seyffart and Eric Balchunas have offered data-driven insights into the likelihood of various crypto ETF approvals. According to their assessment, the chances of an XRP ETF being approved in 2025 stand at 65%—a solid probability given the complex regulatory landscape.
Other cryptocurrencies currently rank higher:
- Litecoin: 90% approval odds
- Dogecoin: 75%
- Solana: 70%
However, these estimates do not diminish XRP’s strong position. With increasing legal clarity, transparent corporate actions from Ripple, and rising demand for diversified crypto exposure, XRP remains a top contender in the race for ETF approval.
Frequently Asked Questions (FAQ)
Q: Does the Ripple vs. SEC lawsuit need to end before an XRP ETF can be approved?
A: No. The lawsuit centers on Ripple’s past sales practices, not XRP’s classification as an asset. Legal experts confirm there is no direct requirement for the case to conclude before ETF consideration.
Q: How long does an ETF approval typically take?
A: From initial filing to final decision, the process usually takes 8 to 12 months due to S-1 reviews, public feedback periods, and SEC evaluations—even if market conditions are favorable.
Q: Has the SEC ever approved an ETF for an asset under legal scrutiny?
A: Yes. The SEC approved Bitcoin futures ETFs while regulatory debates around Bitcoin were still ongoing, setting a precedent for assets like XRP.
Q: What recent developments support XRP ETF approval?
A: Nasdaq’s 19b-4 filing for CoinShares’ XRP ETF, combined with Ripple’s improved legal standing and increased institutional interest, all signal positive momentum.
Q: Could Ripple CEO Brad Garlinghouse influence regulatory decisions?
A: While unconfirmed, reports suggest Garlinghouse may join a federal crypto advisory council. Such a role could enhance Ripple’s engagement with policymakers but wouldn’t directly affect ETF approvals.
Q: Is XRP considered a security by the SEC?
A: Not categorically. A 2023 court ruling found that XRP is not a security when sold to retail investors or traded on exchanges—only certain institutional distributions were under scrutiny.
Market Reaction: XRP Price and Investor Sentiment
The combination of legal progress and ETF momentum has already influenced market dynamics. At the time of writing, XRP price rose 3%, reaching $2.50 after hitting a 24-hour low of $2.41. This uptick coincides with growing bullish sentiment across derivatives markets.
Notably, XRP futures open interest increased by 5%, indicating stronger participation from institutional traders and leveraged investors. Analysts suggest that if XRP maintains support near $2.30, a move toward $3 is plausible in the near term.
Longer-term forecasts are even more optimistic. Some experts project a potential rally to $6, contingent on key catalysts such as:
- Final resolution of the SEC lawsuit
- Approval of a spot XRP ETF
- Expansion of Ripple’s payment network partnerships
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As regulatory frameworks evolve and institutional adoption accelerates, XRP is emerging as one of the most closely watched digital assets in 2025. While challenges remain, the convergence of legal clarity, market demand, and exchange readiness suggests that an XRP ETF may be closer than many expect.