XRP ETF Outlook Unfazed Despite Legal Setback

XRP ETF discussions remain central to Ripple’s future as a pro-XRP lawyer asserts that ongoing litigation does not threaten the chances of regulatory approval. Legal expert Fred Rispoli recently provided insights into the recent developments in the long-standing Ripple v. SEC case and its impact on a potential XRP exchange-traded fund (ETF).

Ripple’s legal confrontation with the U.S. Securities and Exchange Commission has taken another twist. Judge Torres declined a joint motion submitted by both Ripple and the SEC, signaling that the case, which has been active since 2020, is not concluding any time soon. This news swiftly erased over $2 billion from XRP’s market capitalization in just 24 hours, highlighting how sensitive the market remains to developments in the courtroom.

However, according to Fred Rispoli, a lawyer well-known for supporting Ripple, this legal hurdle does not directly endanger the approval of an XRP ETF. He emphasized that the recent denial from the court does not affect XRP’s classification within the secondary market — a key factor in ETF eligibility. Despite alarming headlines, Rispoli believes that the lawsuit’s outcome does not mandate any halt to the progress of a spot XRP ETF.

Crucially, Rispoli pointed out that the injunction ruling from the court only holds power if the SEC decides to enforce it. The regulatory body still has the discretion to waive the restrictions or simply choose not to apply them. This raises a critical issue: whether new leadership at the SEC is willing to take a more cooperative stance toward cryptocurrency innovations such as spot ETFs.

Amid this uncertainty, there are growing signs of a possible behind-the-scenes resolution. Reports indicate that both Ripple and the SEC might be quietly negotiating a settlement. Such an agreement could involve Ripple paying a reduced fine coupled with adjustments to how the company conducts its institutional sales. These reforms are reportedly already underway, with Ripple referring to previous conduct as “historic institutional sales,” implying a strategic move to distance current business practices from past regulatory breaches.

In fact, the internal terminology shift suggests Ripple is proactively ensuring its compliance framework aligns with today’s regulatory expectations. This could serve to reinforce the platform’s credibility with regulators and future ETF issuers alike.

Meanwhile, enthusiasm continues to grow among market analysts. Bloomberg’s senior ETF specialists Eric Balchunas and James Seyffart have gone on record stating there’s a better than 90% chance that spot XRP ETFs, along with those for Solana and Litecoin, will be approved in 2024. This level of optimism implies that ongoing discussions between the SEC and asset managers may be bearing fruit.

The sentiment supports Rispoli’s interpretation: the legal wrangling, while significant, is not currently a barrier to XRP’s integration into mainstream investment vehicles. ETFs remain a powerful tool for accessibility and institutional interest, and Ripple’s recent efforts to reform and distance itself from past regulatory violations may strengthen its position in the eyes of regulators.

It’s clear that Ripple is playing a long game — legally and strategically — to pave the way for broader adoption of XRP. While the lawsuit is far from over, the legal environment around XRP remains dynamic, and ETF prospects appear brighter than the headlines might suggest.

For the XRP community, Rispoli’s commentary offers a degree of reassurance. He suggests that the current court decision is only a temporary setback and won’t derail the broader momentum XRP has been gathering in regulatory circles. As Ripple continues to evolve its institutional practices, the likelihood of achieving ETF status grows increasingly plausible.

Related: Expert Advice: Sell XRP If You’re Confused

The coming months could shape a new chapter for XRP in mainstream finance. All eyes will now be on the SEC’s next steps and whether they align with an increasingly receptive stance on digital asset ETFs.