XRP Gains Commodity Classification in CFTC Event Contracts Filing

• $XRP listed as commodity in CFTC Event Contracts under Rule 13.43 specifications.
• Court ruling confirmed $XRP is not a security despite past SEC allegations.
• Classification may boost $XRP derivatives, aligning it with Bitcoin and Ethereum.

$XRP has been classified as a commodity in newly listed U.S. Commodity Futures Trading Commission (CFTC) Event Contracts, marking a major regulatory development for the cryptocurrency. The classification appears in an official filing under Rule 13.43 of the exchange’s rulebook, detailing the specifications for $XRP cryptocurrency event contracts. While not a formal declaration from the CFTC on $XRP’s overall regulatory status, the move aligns the token with Bitcoin and Ethereum, which have been treated as commodities in similar contexts.

The filing outlines the contract scope, identifying $XRP as the underlying asset for the new class of event contracts. Additionally, the contracts reference the spot $XRP bid/ask midpoint prices provided by Lukka, Inc., quoted in U.S. dollars.

For intraday trading, the contracts feature two formats: 2-hour and 20-minute intervals. The first expirations occur at 1:00 a.m. ET on Saturday and 11:20 p.m. ET on Friday, respectively, with final expirations at 4:00 p.m. ET the following Friday. Strike interval widths are set at 0.01 for 2-hour contracts and 0.004 for 20-minute contracts, with nine strike levels listed for each series.

Regulatory Context and Legal Background

The classification of $XRP as a commodity in this filing comes after years of legal uncertainty. The U.S. Securities and Exchange Commission (SEC) had previously alleged that $XRP was an unregistered security in its case against Ripple Labs. However, a federal court ruled that $XRP itself was not a security, a decision the SEC did not overturn despite appealing other parts of the ruling.

Neither the SEC nor the CFTC has issued an official statement defining $XRP’s regulatory status. The filing’s treatment of $XRP as a commodity mirrors approaches seen in other financial products, such as commodity-based trusts referenced in spot ETF applications.

Potential Market and Institutional Impact

Although this filing is restricted to the derivative products listed on the exchange, the fact that $XRP is considered a commodity with the purpose of trading may impact market participation. With this type of classification, regulated derivative instruments can be created, like futures and options on $XRP prices.

The decision is further made with a change in regulatory attitudes. The current Head of the SEC, Paul Atkins, has already indicated that the majority of crypto assets do not qualify as securities, a differentiating viewpoint from that of Gary Gensler, who was Secretary of the SEC and only listed Bitcoin as a non-security.