Cryptocurrency investment company Bitwise has filed an updated S-1 registration document with the U.S. Securities and Exchange Commission (SEC) to move forward with the application process for a Ripple (XRP) ETF. This update focuses on trust structures, custody arrangements, and share creation and redemption mechanisms.
“Investors who decide to buy or sell Trust Shares (Bitwise XRP ETF) may place trade orders through a broker and may incur customary brokerage fees and commissions,” the filing states. It has been. Prior to this offering, no public market for the shares existed. Investing in the Trust involves risks similar to those associated with investing directly in XRP and other significant risks. ”
According to the filing, the XRP custodial agreement therefore ensures that the Trust’s assets remain separate from the custodian’s other holdings and enhances the security of the private keys associated with XRP.
Bitwise plans to use cold storage to store trust assets and only store a small amount of assets in hot wallets to meet day-to-day operational needs. Bitwise has appointed a chief executive officer to execute XRP trading across multiple trading platforms, including Bitstamp, Kraken, Coinbase, and LMAX, to increase trading efficiency. CEO also provides short-term financing in the form of trade credits for timely order execution even if funds or XRP in the trust are not immediately present.
Bitwise plans to create and redeem shares in blocks of 10,000 units called baskets, and the basket amount (or XRP required per basket) will be recalculated daily after taking into account outstanding fees and expenses. I shared that.
The filing was filed after Bitwise’s first S-1 form on October 2, when it sought to introduce the XRP ETF to the U.S. market for the first time. Bitwise acknowledged the regulatory uncertainty surrounding XRP in its second filing, as the SEC’s appeal of the Ripple ruling is pending and could be the nemesis of the Bitwise XRP ETF launch.
As a result, Bitwise has revealed that if XRP is classified as a security, it will liquidate its holdings based on the terms of the “trust agreement.” In its filing, Bitwise also discussed measures aimed at protecting investors and ensuring compliance with federal securities laws.
Finally, Bitwise has partnered with both Prime Enforcement Agent and XRP Custodian Coinbase Global to provide up to $320 million in commercial crime insurance policies covering a variety of risks including theft, fraud, and cyber-attacks. I have confirmed that it is maintained. insufficient.
“The insurance maintained by Coinbase Global is shared among all Coinbase customers and is not specific to the trust or customers holding XRP at XRP custodians or prime execution agents, and is used to protect the trust,” the company said. “It may not be possible or sufficient.” Eliminate all possible losses and causes of loss. ”
Also read: Bitwise XRP ETF: What are the chances of approval?
