02.07.2025 21:58
The Securities and Exchange Commission (SEC) has issued a temporary stay order halting Grayscale Investments' launch of its multi-asset cryptocurrency exchange-traded fund (ETF), despite previously granting approval on July 1st. This unexpected development freezes the conversion of Grayscale's Digital Large Cap Fund (GDLC) into an ETF, leaving investors and analysts speculating on the reasons behind this sudden reversal.
Several plausible explanations for the SEC's actions have emerged. One theory suggests that internal SEC divisions may still be reviewing GDLC's structure, requiring further scrutiny before proceeding. Alternatively, the SEC might be adopting a more cautious approach, delaying all crypto ETF listings until the completion of a comprehensive regulatory framework for token-based ETFs. Another prominent analyst posited that the SEC's decision could be strategically timed, waiting for the market debut of spot ETFs tracking other major cryptocurrencies like Solana, Cardano, and XRP before permitting Grayscale's multi-asset fund to trade.
The SEC's initial approval, which amended NYSE Arca Rule 8.500-E, paved the way for GDLC's units to be listed on the exchange. Holding approximately $775 million in assets under management, GDLC encompasses a diversified portfolio of prominent cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, and Cardano. Upon lifting of the stay order, the fund will transition to a more efficient in-kind creation and redemption mechanism, replacing its current closed-end structure.
Furthermore, ongoing efforts by the SEC and US exchanges to establish a standardized framework for token ETF listings suggest a move towards streamlining the approval process. This proposed generic listing standard, potentially involving a simplified Form S-1 filing and a 75-day review period, would drastically reduce the regulatory burden on issuers, eliminating the need for individual Rule 19b-4 amendments. This simplification, hailed by analysts as a significant positive development, promises to accelerate approval times and establish clear benchmarks for market capitalization, trading volume, and liquidity. This streamlined process will ultimately benefit the entire cryptocurrency ETF industry.
