SEC's Pause of Grayscale Fund Is Likely Temporary

The U.S. Securities and Exchange Commission apt halted the motorboat of the Grayscale Digital Large Cap Fund (GDLC) for administrative reasons, not governmental ones, aggregate individuals acquainted with the substance told CoinDesk.

The SEC approved GDLC to uplist arsenic an exchange-traded money (ETF) connected Tuesday done staffers' delegated authority, meaning the regulator's commissioners did not person to ballot connected the application. Nevertheless, the regulator informed Grayscale and the New York Stock Exchange — GDLC's listing spouse — connected Wednesday that the SEC's commissioners volition reappraisal the approval, pausing GDLC's go-live day successful the meantime.

GDLC is based connected CoinDesk Indices' CoinDesk 5 Index.

Halting the motorboat gives the SEC clip to make listing standards for different ETFs that would motorboat nether the aforesaid mechanism, the individuals said.

There's besides the information that GDLC contains 2 integer assets — XRP XRP and Cardano ADA — that don't presently person their ain idiosyncratic ETFs. Two of the different assets successful the basket, Bitcoin BTC and Ethereum ETH, person had their ain ETFs since 2024, and the SEC has adjacent antecedently okayed funds containing some of those assets. Solana SOL besides saw its archetypal ETF motorboat earlier this week, though applications for different ETFs tied to the plus stay nether SEC review.

The SEC faces deadlines aboriginal this twelvemonth for the XRP, ADA and SOL applications.

James Seyffart, Bloomberg Intelligence ETF analyst, told CoinDesk that the SEC’s intermission was “not normal.” In a post connected X, helium wrote that determination are 2 imaginable reasons down the move.

“The SEC doesn't privation to fto thing to motorboat nether the 19b-4 process until they officially o.k. oregon travel up with immoderate model for integer assets successful the ETF wrapper.” The different option, helium wrote, is that the SEC wants to enactment connected thing successful narration to a circumstantial facet of the money itself, for illustration the structure.

In a statement, a Grayscale spokesperson said the SEC's intermission "was unexpected" but "reflects the dynamic and evolving quality of the regulatory scenery surrounding a first-of-its-kind integer plus merchandise similar GDLC."

"Grayscale remains committed to pursuing the listing of GDLC arsenic an ETP and we are moving intimately with cardinal stakeholders to conscionable each indispensable requirements. We volition supply further updates arsenic further accusation becomes available," the spokesperson said.

An 8-K filing from Grayscale said the steadfast "remains committed to pursuing the listing of the Fund connected NYSE Arca and continues to enactment intimately with cardinal stakeholders to get support of the application."