XRP ETFs are once again facing regulatory hurdles, as the U.S. Securities and Exchange Commission (SEC) has introduced another round of delays in its decision-making process. The delay comes at a time when investors and industry insiders are eagerly pushing for more clarity around crypto-based financial products.

SEC Puts XRP ETF Review on Hold

In a recent announcement, the SEC has postponed its review of exchange-traded funds (ETFs) that would directly or indirectly be linked to XRP, Ripple’s native digital token. Although the crypto community has grown significantly in recent years and major cryptocurrencies like Bitcoin and Ethereum already have approved spot ETF products, XRP continues to be caught in regulatory limbo.

This delay stems from the need for more public input regarding the structure and compliance measures of proposed XRP ETFs. Regulators say they need additional time to assess the market manipulation risks and ensure these products comply with investor protection standards. While not a final rejection, the postponement significantly slows down the approval timeline for any XRP-based ETFs coming to market.

Ongoing Legal Concerns and Ripple’s Background

Much of the SEC’s hesitation can be traced back to its ongoing legal battle with Ripple Labs, which began in late 2020. The agency had previously accused Ripple of conducting an unregistered securities offering when it initially sold XRP tokens. Although a partial ruling last year determined that XRP is not a security when sold on public exchanges, ongoing litigation and unresolved regulatory questions still create uncertainty.

The unresolved status of this case continues to affect Ripple’s ability to expand market adoption for XRP in traditional finance products, such as ETFs. Until a final court decision or regulatory clarity emerges, the SEC appears unwilling to greenlight any decisions that could signal precedent or acceptance of XRP as a non-security.

Market Reaction and Crypto Community Response

This latest delay has disappointed many in the crypto sector. Advocates argue that XRP, known for its speed and cost-efficient blockchain transactions, deserves a place in the growing ETF market. The community has been increasingly vocal in demanding a more streamlined and transparent review process for crypto-based financial instruments, especially for established projects like XRP that have been in circulation for over a decade.

The delay could also affect other applications to create financial products tied to altcoins outside the Big Two—Bitcoin and Ethereum. Some fear that continued foot-dragging by the SEC may stifle innovation and discourage financial institutions from embracing crypto assets beyond the top-ranked coins.

Blockchain’s role in institutional finance continues to evolve as XRP ETF decisions remain pending.

What’s Next for XRP ETFs?

While the delay is a setback, it doesn’t put an end to the possibility of XRP ETFs becoming a financial reality. Legal experts believe that if Ripple secures a favorable outcome in its court battle with the SEC, regulators may reevaluate pending proposals. In the meantime, applicants will likely continue to revise and improve their filings in hopes of aligning them with compliance requirements.

As of now, the timeline remains unclear. Investors and institutional partners seeking exposure to XRP through regulated channels must wait for further developments on both the legal and regulatory fronts. Until then, XRP’s use will likely remain limited to direct crypto trading platforms rather than traditional financial vehicles like ETFs.

Related: XRP Price: $12M Max Pain for Bears

Stay tuned for more updates about XRP’s journey toward mainstream financial integration, especially as court rulings and SEC decisions continue to shape the crypto industry’s future.