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.