FalconX's October acquisition of 21Shares has positioned the cryptocurrency prime broker to accelerate institutional adoption of the newly approved XRP exchange-traded fund.
Cboe BZX Exchange approved the listing of the 21Shares XRP ETF on December 10, bringing the TOXR product one step closer to trading.
The ETF will track XRP prices through the CME CF XRP-Dollar Reference Rate, offering regulated exposure to the fourth-largest cryptocurrency by market capitalization.
FalconX acquired the Zurich-based ETF issuer for an undisclosed sum in October.
The deal merged 21Shares' $11 billion in assets across 55 exchange-traded products with FalconX's institutional trading infrastructure.
FalconX serves more than 2,000 institutions globally and has facilitated over $2 trillion in trading volume.
What Happened
The 21Shares XRP ETF received automatic approval from the Securities and Exchange Commission three weeks ago through an 8-A registration filing.
Cboe BZX Exchange confirmed the listing approval in a Wednesday filing with the SEC.
The product awaits final issuance notices before trading can begin.
TOXR will charge a 0.3% annual sponsor fee, calculated daily and paid weekly in XRP.
The fund employs a multi-custodian structure with Coinbase Custody, Anchorage Digital Bank, and BitGo Trust Company managing physical XRP reserves.
Ripple Markets seeded the ETF with 100 million XRP, worth approximately $226 million.
The approval follows the SEC-Ripple lawsuit settlement earlier this year, which affirmed XRP is not a security in secondary sales.
Several XRP ETFs launched in late November from Bitwise, Grayscale, and Franklin Templeton.
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Why It Matters
The combination of FalconX's prime brokerage capabilities with 21Shares' ETF infrastructure creates what analysts call a "unified powerhouse" for institutional crypto products.
FalconX provides over-the-counter trading, market-making services, and prime brokerage to banks and hedge funds.
The firm launched a 24/7 OTC options platform last month covering Bitcoin, Ethereum, Solana, and other digital assets.
Integrating 21Shares' distribution network allows TOXR to connect directly with trading desks and settlement channels previously hesitant about cryptocurrency exposure.
"FalconX has built the institutional backbone for trading, derivatives, and credit," CEO Raghu Yarlagadda said in October.
"Extending that infrastructure into listed markets through 21Shares is a natural next step toward strengthening market efficiency."
The multi-custodian structure addresses institutional concerns about counterparty risk that have historically limited crypto ETF adoption.
XRP ETFs collectively attracted nearly $1 billion in assets since launching in November, demonstrating strong institutional demand despite XRP trading below $2.10.
The sector recorded over $170 million in weekly inflows with no outflows, according to market data.
Russell Barlow will continue as CEO of 21Shares, which operates independently under the FalconX umbrella.
The acquisition marks FalconX's third strategic deal in 2024, following purchases of derivatives firm Arbelos Markets and asset manager Monarq Asset Management.
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