Bitwise Submits Updated S-1 Registration Document to the U.S. SEC for Advancing Its Ripple (XRP) ETF Application Process

The cryptocurrency investment firm Bitwise has submitted an updated S-1 registration document to the U.S. Securities and Exchange Commission (SEC)

Cryptocurrency investment firm Bitwise has filed an updated S-1 registration document with the U.S. Securities and Exchange Commission (SEC) to further its Ripple (XRP) ETF application process. The update pertains to the trust structure, custody arrangements, and share creation and redemption mechanisms.

“Investors who decide to buy or sell Shares of the Trust [Bitwise XRP ETF] will place their trade orders through their brokers and may incur customary brokerage commissions and charges,” the filing reads. “Prior to this offering, there has been no public market for the Shares. Investing in the Trust involves risks similar to those involved with an investment directly in XRP and other significant risks.”

The XRP Custody Agreement ensures that the Trust’s assets remain separate from the custodian’s other holdings, the filing states, adding to the security of the private keys associated with the XRP.

Bitwise will use cold storage to hold the trust’s assets and will keep only a small amount of assets in hot wallets to meet daily operational needs, according to the filing. To enhance trading efficiency, Bitwise has appointed a chief executive agent to conduct XRP transactions across multiple trading platforms, including Bitstamp, Kraken, Coinbase, and LMAX. The chief executive agent will also provide short-term financing in the form of Trade Credits for a timely order execution even when the Trust’s funds or XRP are not immediately present.

Bitwise will create and redeem shares in blocks of 10,000 units, which are referred to as Baskets, the filing states, adding that the Basket Amount (or the required XRP per Basket) will be recalculated daily after considering accrued fees and expenses.

The filing follows an initial S-1 form on Oct. 2, where Bitwise first attempted to introduce an XRP ETF into the United States market. In the second filing, Bitwise has addressed the regulatory uncertainties concerning XRP, as the SEC appeal over the Ripple ruling is still pending and could hinder the launch of the Bitwise XRP ETF.

As a result, Bitwise has stipulated that if XRP is classified as a security, it would liquidate its holdings under the terms of the ‘Trust Agreement.’ In the filing, Bitwise has also outlined measures that are designed to protect investors and ensure compliance with federal securities laws.

Finally, Bitwise has confirmed that Coinbase Global, which is affiliated with both the Prime Execution Agent and the XRP Custodian, maintains a commercial crime insurance policy of up to $320 million, covering a range of risks, including theft, fraud, and cyberattacks, which is insufficient.

“The insurance maintained by Coinbase Global is shared among all of Coinbase’s customers, is not specific to the Trust or to customers holding XRP with the XRP Custodian or Prime Execution Agent, and may not be available or sufficient to protect the Trust from all possible losses or sources of losses,” the filing concludes.