Feb. 22, 2025
Support for the Approval of WisdomTree XRP Fund Listing on Cboe BZX Exchange Dear SEC Team, Thank you for the opportunity to comment on the application for the listing and trading of WisdomTree XRP Fund on the Cboe BZX Exchange. I strongly support this application and would like to present several key arguments to address potential concerns and demonstrate the suitability of XRP as an investment product. --- 1. Anti-Money Laundering and Illicit Activities Potential SEC Concern: It might be argued that XRP, due to its speed and semi-anonymity, poses a risk for money laundering and illicit activities. Counter-Argument and Clarification: Comparison with Fiat Currencies: Money laundering is not limited to digital assets. Cash is historically the most widely used medium for money laundering due to its anonymity and lack of traceability. In contrast, XRP transactions are transparent and traceable on the blockchain. Transparency through Blockchain Technology: XRP transactions are publicly visible and can be tracked using blockchain analytics tools like Chainalysis and Elliptic, providing more transparency than cash or traditional bank transactions. KYC and AML Compliance: Cboe BZX Exchange and all participating brokers are subject to strict KYC (Know Your Customer) and AML (Anti Money Laundering) regulations, effectively minimizing the risk of illicit use. No Valid Argument Against XRP: If money laundering were a reason to reject XRP, then the same reasoning would apply to cash and other fiat currencies, as they can also be misused. --- 2. Digital Nature and Security Potential SEC Concern: XRP could be viewed as too digital and insecure, particularly regarding cyber threats and system failures. Counter-Argument and Clarification: Comparison with Fiat Currencies: Fiat currencies are already digitalized, as the vast majority of global money supply exists only in digital form. Cash reserves do not cover digital account balances, which means the current financial system is already heavily reliant on digital security and cyber resilience. Decentralization and Security of the XRP Ledger: The XRP Ledger uses decentralized validation, which makes attacks on the network difficult. It is open-source and operated by independent validators worldwide, including universities and financial institutions. High Security Standards and Insurance: The fund can implement cyber insurance and contingency plans to further protect investors. Equivalent Security Standards to BTC and ETH: If Bitcoin (BTC) and Ethereum (ETH) are considered secure enough for funds and ETFs, then the same security standards apply to XRP, as they utilize similar technologies. --- 3. Volatility and Market Manipulation Potential SEC Concern: XRP might be seen as too volatile and susceptible to market manipulation. Counter-Argument and Clarification: Comparison with Other Asset Classes: Volatility is not exclusive to cryptocurrencies. Commodities like oil or precious metals and even tech stocks exhibit high volatility and are still traded in ETFs and funds. Young Market with Growth Potential: Cryptocurrencies are a relatively young market, leading to higher volatility. As the market matures and market capitalization grows, volatility will decrease, as observed in other asset classes (e.g., tech stocks in the early 2000s). Market Saturation and Reduced Manipulation: As more investors and institutional capital enter the market, it becomes less susceptible to manipulation. Listing the WisdomTree XRP Fund would increase market saturation and thus reduce the influence of “whales” (large investors). Regulation Encourages Stability: Rather than banning or blocking cryptocurrencies, clear regulation is necessary to prevent market manipulation and ensure long-term stability. China attempted to ban Bitcoin, but this only shifted trading to offshore exchanges without impacting the market itself. --- 4. Trust and Acceptance as an Asset Potential SEC Concern: It may be argued that XRP does not enjoy sufficient trust to be considered a safe investment product. Counter-Argument and Clarification: Trust through Use Cases and Partnerships: XRP is used as a bridge currency in international payments and is adopted by financial institutions worldwide, fostering trust and acceptance. High Demand and Strong Community: Despite regulatory challenges, XRP has shown high demand and a loyal community, indicating strong investor confidence. Comparison with Other Assets: Trust is the most important measure of value for any currency or asset. XRP, despite challenges, maintains a high level of trust, making it a suitable investment product. Regulated Funds Enhance Trust: Listing on the Cboe BZX Exchange would further enhance trust as trading would be under strict SEC regulations and market surveillance. --- 5. Conclusion and Recommendation I respectfully urge the SEC to approve the application for the WisdomTree XRP Fund, as: All relevant concerns have been thoroughly addressed. XRP shares similar properties with BTC and ETH, which are already traded in funds. Regulating XRP would lead to higher market stability and reduced volatility. Demand for regulated crypto investment products continues to grow, and rejecting this application would disadvantage U.S. investors. I appreciate your consideration of my arguments and hope that they contribute to a well-informed and fair evaluation of the application. Sincerely, Max Staudinger