Bitwise files with SEC to launch XRP ETF: CNBC Crypto World

Today, Bitcoin tests support at the $60,000 level as Middle East tensions rise. Bitwise files to launch an XRP-backed ETF. And Georgetown professor Jim Angell breaks down the crypto policy positions of both presidential candidates. Welcome to CNBC's Crypto World, I'm Tanaya McKeel. Cryptocurrency is under pressure this morning, a day after a sharp escalation of tensions in the Middle East. By noon Eastern, Bitcoin slipped 1%, trading at $61,800. Ether fell 2.5% to $2,460. And XRP dropped nearly 5%, trading at $0.58. Let's stick with XRP as we tackle the top stories. Bitwise just took a step toward launching what would be the first ETF tracking XRP. The asset manager submitted a registration filing, also known as an S-1, to the SEC this morning. The S-1 comes just two days after Bitwise registered an XRP trust product in Delaware. The company's CEO, Hunter Horsley, announced the development on X this morning, saying XRP has been an enduring crypto asset for more than a decade with investor interest. Since the approval of spot Bitcoin ETFs in January, asset managers have continued to push for crypto-backed exchange-traded products, including the Ether ETFs now trading on U.S. markets as of July, plus applications among some for a Solana-backed ETF. Next, a federal appeals court ruled that Americans can bet on 2024 congressional elections. That decision was made in response to the CFTC's appeal in a legal battle with Prediction Market Call Sheet. Political betting is gaining traction as the U.S. presidential election approaches, with more than $1.1 billion at stake on PolyMarket, a platform that uses crypto tokens for its bet-placing system. That platform was fined by the CFTC in 2022. Now, PolyMarket doesn't allow Americans to bet on its platform. And this comes a week after CFTC Chair Russ Benham joined CNBC, where he said these markets are illegal under current law and didn't rule out the possibility of enforcement actions against them before the election. The CFTC declined to comment on the ruling, but noted that it was for the agency's request for an emergency stay, not the appeal itself. All right, sticking with politics for our main story, crypto world's Mackenzie Segalos spoke with Georgetown professor Jim Angel about both presidential candidates' crypto policies and what regulatory changes he expects in the coming months. So crypto has become a big part of the conversation in the 2024 election. You've got crypto companies outraising big oil and the banks, all in the hope of electing candidates up and down the ballot who are pro-crypto, or at least not anti-crypto. And part of that has been about putting someone in the White House who wants to switch things up over at the SEC. You've got Chair Gary Gensler, who's largely viewed by the industry as this major roadblock to growing in the US. Donald Trump has said that he would fire him, which he can't exactly do, but he could swap in a new chairman. How are you thinking about the fate of SEC Chair Gensler under Trump versus a Harris administration? Well, a lot of people are very upset about Chair Gensler's activities, not just in crypto, but in other areas. So there are a lot of people who'd be very happy to see him go. However, his position as an SEC commissioner has a very specific appointment from Congress, so it is not a political spoils job. Yes, a new chair could be swapped in, but there would still be three Democratic commissioners and two Republicans on day one. So it will take time for a new president to install new people at the SEC. So that being said, if a new chair is swapped in, President Trump would likely put in one of the Republican commissioners who would have a very different agenda. And one thing to remember about the SEC, the chair controls the agenda. Each minority commissioner has five staffers. The chair has about 5,000. So in order to get anything done, it has to be done with the chair's approval. So the only thing the other commissioners do is they get to vote on things. But that's about it. So if a new chair comes in, we might see a very different direction. And that is one question I have. So, you know, let's say we did see this play out where a new chair was swapped in under a new administration. What does that mean for ongoing litigation? Coinbase, for example, has been in the midst of fighting the SEC for over a year now. Well, the SEC is like a super tanker and it doesn't change course very quickly. That even when they've made some horrific mistakes, they don't like to admit it. And, you know, they just sort of keep on going on their old path. So I would be hopeful that a new regime at the SEC would have a more appropriate response to so-called digital assets. I'm encouraged that Vice President Harris has announced her support for digital assets. But the SEC has shown, even long before Chair Gensler, an inability to come to grips with this new technology. And one thing the SEC does not understand is a different technology requires a different technology of regulation. So, for example, you know, taxi cabs in New York have bulletproof screens to protect the drivers from robbery. Ubers don't need bulletproof screens because they don't carry cash. So when you have a new technology, you have to rethink regulation. And that's something the SEC has been unable to do. So it isn't just the chair, it's the entire organization that needs an overhaul. I want to talk a little bit more about the election. I think that crypto-focused voters are trying to figure out where the two candidates stand on the issue. From your perspective, can you lay out how Donald Trump and Kamala Harris stack up on the issue of crypto? All right. Donald Trump sees a lot of crypto people are very angry at the government. And his core is people who are angry at the government. And so he sees a natural affinity between his campaign and the crypto crowd. So obviously, he wants to do things that will please his constituency. And also, he'd love them to give him money because he loves it when people give him money. On the Harris side, I think that the vice president understands that the prior administration has done a very poor job in addressing this new technology and that a reset is necessary. She hasn't come out with any specific details, but there's a lot that can be done. We've seen other jurisdictions come up with appropriate regulations for digital assets. And it can be done in the U.S. This is an amazing new technology. It has a lot of promise, but there's been a lot of fraud. There's been a lot of manipulation. We need good regulation. The just-say-no attitude of the SEC is not the right way to do it. Donald Trump and his family have been heavily promoting a DeFi project that they're a part of called World Liberty Financial. Trump's potential conflicts of interest where business is concerned has come up in the past. Do you think that his private businesses in the crypto space specifically create a risky incentive for him to be soft on the industry? Now, Trump is in it for Trump. Trump will do anything to scrape up a buck. And if he can sell dodgy tokens in something that nobody understands what it does and run away with the money, he'll do it. On the Harris side, we finally heard from the vice president with a sort of vague comment encouraging innovation in the space while protecting consumers and investors. We know that her team has been meeting behind closed doors with some of crypto's biggest leaders. Any reaction to Kamala Harris's approach on crypto and what it might signal from a policy perspective? Or is it just too little from her at this point to tell either way? Well, it shows a return to common sense because we have these two extreme views. We have the just-say-no approach of the SEC, which doesn't work. And then we have the anything-goes from the traditional crypto people who don't want any government oversight. Basically, what we need is a way to encourage innovation, to allow people to innovate. And also, at the same time, make sure that people who are selling tokens tell people what's in them, that the people who are trading them aren't manipulating the prices, that the intermediaries who are handling these transactions aren't stealing your money. This is why we regulate financial services, because of a long, long history of theft and fraud and manipulation. And in the past 10 years in the crypto world, we have seen all of this, which is why a lot of people are very skeptical of the world. But the skeptics ignore the fact that this technology is very promising. We have the ability to overhaul the plumbing and the mechanics of our financial markets in ways that actually improve things for everyone. So we want to make sure that we bring in the good innovation, while at the same time, we stomp out the fraud, the manipulation, the theft that we've seen. And that's why we need good, smart regulators who understand the technology, who come in with the appropriate technology, and who don't just have this, well, we'll sue you in court five years from now when we figure out what we want to do attitude, which is what the SEC has been doing. If even a place as slow as the European Union can come up with something like their markets and crypto assets directive, we should be able to do it too. Now, you're a market structure guy. Bitwise just submitted an application for an XRP ETF trust in Delaware. People have been talking about a Solana ETF in the US. Meanwhile, you've got BlackRock and others who are pushing for a more robust set of products by pushing for options. Talk to me about the future of institutional adoption of these crypto products. What's the next priority and where do we go from here? Right. Well, Wall Street will sell anything they can make a buck on. And that's what they're good at. And they understand as intermediaries that a lot of people really don't want to be messing with private keys and wallets and all that. And so they're providing a service. They're providing a service of convenience. Anybody who wants to can basically download wallet software and buy their own Bitcoin or Ethereum or Solana or any of those other cryptos. But it's a lot simpler just to go tap, tap, tap on your preexisting brokerage account. Now, the key thing, though, is we need to make sure that consumers are being informed as to what those tokens are. You know, there's thousands of tokens out there, some of them quite useful, some of them complete frauds. And so what we need is good cops on the beat who can allow the law abiding citizens through and put the criminals in jail. And right now we have an SEC chair who basically views everyone as a criminal. OK, that's all for Crypto World today. We'll be back again tomorrow and we'll see you then.