Grayscale ETF Faces Indefinite Delay as SEC Reassesses Earlier Approval

It solely took in the future for the US Securities and Alternate Fee (SEC) to stroll again on an approval given to Grayscale Digital Giant Cap Fund (GDLC) to transform to an exchange-traded fund (ETF), inadvertently halting its launch.

On 1 July 2025, the SEC shared a letter stating its intention to once more overview the current approval granted to GDLC to transform its fund into an ETF.

The SEC’s approval of the Grayscale ETF had been welcomed as a landmark improvement for multi-asset crypto ETFs within the US. For the uninitiated, Grayscale brings a regulatory construction to a product that tracks Bitcoin, Ethereum, and different main tokens by changing its multi-asset crypto fund.

The regulatory physique’s preliminary approval indicated that its authorities have been assured within the product’s readiness for the market. Nonetheless, it has determined to invoke Rule 431 of the SEC’s Guidelines of Apply to overview its earlier determination.

Breaking information from yesterday and ideas

– Regardless of preliminary clearance from the SEC, it lately hit pause on plans to transform Grayscale’s Digital Giant Cap Fund into an ETF

The non permanent pause doesn’t essentially imply denial, it’ll set off additional overview, to evaluate: Market…

— Salazar.eth (@0xSalazar) July 3, 2025

The GDLC fund holds $755 million in Bitcoin, Ethereum, Solana, XRP and Cardano. In response to some analysts, the SEC’s company workers signed off on the approval moderately than the commissioners, therefore the decision again.

In its letter addressed to the New York Inventory Alternate (NYSE), the SEC stated, “This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action.”

Moreover, it confirmed, “In accordance with Rule 431(e), the July 1, 2025, order is stayed until the Commission orders otherwise.”

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Altcoin Publicity Attracts Uncommon SEC Assessment of the Grayscale ETF Software

The GDLC fund, launched in 2018, contains a wide range of cryptocurrencies, with greater than 91% of its holdings invested in Ethereum and Bitcoin. The remaining is made up of altcoins corresponding to XRP, Solana and Cardano.

Additionally, the GDLC contains established cryptocurrencies based mostly on their market dimension and adjusts each quarter to match adjustments. If permitted, the GDLC will turn into a public ETF that lets traders maintain a number of crypto belongings in a single place.

Traditionally, such reversals are unusual. They usually sign ongoing inside debates on investor safety, managing regulatory consistency and market stability. Altcoins, posing various levels of danger, might have been the set off for the SEC commissioners to renege on the staff-level approval.

The inclusion of belongings like XRP and Solana, whose standing remains to be up for debate, could have raised considerations relating to the authorized therapy of the underlying tokens and the readability of disclosure as multi-asset merchandise, corresponding to Grayscale’s, add extra ranges of structural and authorized complexity, in distinction to single-asset ETFs.

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Bloomberg Analyst Thinks SEC is Reassessing Grayscale ETF to Develop Clearer Guidelines

Some analysts, corresponding to Bloomberg’s Eric Balchunas, consider that the SEC is reassessing the Grayscale ETF to develop clearer guidelines earlier than permitting extra advanced crypto funds. Baluchnas additionally speculates that the regulatory physique is ready to set constant requirements for crypto funding merchandise earlier than giving the inexperienced sign to GDLC’s ETF.

The plot thickens. Higher degree of SEC telling $GDLC it may’t launch till in any other case notified. Undecided why, no different data than this letter. My guess tho: They wish to situation the crypto ETP itemizing requirements earlier than any ’33 act spot ETFs hit market with these different cash. So probably…

— Eric Balchunas (@EricBalchunas) July 2, 2025