A fresh ETF filing with the U.S. Securities and Exchange Commission (SEC) has flagged whale manipulation as a clear risk in the XRP market. The Cyber Hornet S&P500/XRP ETF prospectus notes that a small number of large holders control much of XRP’s supply. Their trades could sway prices and reduce market stability.

Attorney Bill Morgan said the filing is significant because an institutional applicant has acknowledged a risk often brushed aside in crypto circles. Many traders point to broader market forces or speculation to explain sharp moves. But Morgan argued that if an ETF sponsor shows whale activity in a formal SEC document, it should be treated as a genuine concern.

The filing also detailed XRP’s structural risks. Since its entire supply was created at launch, XRP cannot expand to meet rising demand. Without mining or staking rewards, validators secure the network without new issuance. This setup makes XRP different from assets like Bitcoin and Ethereum, but it also adds to liquidity challenges and volatility.

By identifying whale manipulation as a material risk, the ETF filing may influence how regulators, institutions, and investors approach crypto markets. It could mark a step toward greater transparency and a more open discussion about the realities of trading digital assets.

“If an institutional applicant for an EFT acknowledges the risk of whale manipulation then it should be considered a real risk. Personally if people are not prepared to acknowledge the possible risk of some market manipulation in crypto, I wonder whether they should invest in the space at all,” Morgan said.