Canary XRP Trust Seeks SEC Nod for Exchange Shares
Published Date: 2/25/2025
Notice
Summary
The Cboe BZX Exchange wants to start listing and trading shares of the Canary XRP Trust, a new commodity-based trust tied to XRP cryptocurrency. This change affects investors looking for new ways to trade XRP through a regulated exchange, with no fixed end date for the trust. The SEC is now reviewing this proposal and inviting public comments before it can go live.
Analyzed Economic Effects
7 provisions identified: 3 benefits, 2 costs, 2 mixed.
Regulated XRP shares proposed
The Exchange filed to list and trade shares of the Canary XRP Trust, a commodity-based trust that would hold spot XRP. The Trust was formed June 3, 2024, the Sponsor filed a Form S-1 dated October 8, 2024, and the SEC published the filing notice on February 19, 2025 and is soliciting public comments.
Custody in segregated cold storage
The Trust's Custodian will hold all Trust XRP in segregated cold storage addresses, safeguard private keys, and will not withdraw, loan, hypothecate, pledge, or otherwise encumber the Trust's XRP without the Trust's instruction. Custody practices and segregation are described as verifiable via the XRP blockchain.
Cash-only 10,000-share creations/redemptions
Creations and redemptions for the Trust occur in Creation Baskets of 10,000 Shares, and authorized participants will deliver only cash to create Shares and will receive only cash on redemption. The Exchange requires a minimum of 100,000 Shares outstanding at commencement of listing, and purchase orders for creations must be placed by 4:00 p.m. ET.
Daily NAV and 15-second IIV updates
The Trust's NAV will be calculated once daily as of 4:00 p.m. ET and published daily; an Intraday Indicative Value (IIV) will be disseminated every 15 seconds during Regular Trading Hours (9:30 a.m. to 4:00 p.m. ET). The Trust will also publish holdings daily and use a Pricing Benchmark that aggregates XRP trading across major spot platforms.
Trading delayed until S-1 effective
The Registration Statement for the Trust is not yet effective and the Shares will not trade on the Exchange until the Registration Statement on Form S-1 is declared effective. The SEC is reviewing the proposed rule change and soliciting public comments following the February 19, 2025 filing.
Trading halts tied to pricing dissemination
The Exchange may halt trading in the Shares if the IIV or the value of the Pricing Benchmark is not being disseminated as required; if such interruption persists past the trading day it will halt no later than the next trading day. The Exchange will also halt trading if the NAV is not disseminated to all market participants at the same time.
No forks/airdrops included in NAV
The Trust will not acquire or include any incidental rights or assets (for example, assets from forks or airdrops) in determining the Trust's NAV; such incidental assets will be disclaimed and not taken into account for NAV calculations.
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