Key Details Behind the SEC’s Decision
The U.S. Securities and Exchange Commission (SEC) has temporarily halted the launch of Grayscale’s Digital Large Cap Fund (GDLC) ETF, just one day after its initial approval. Sources indicate the delay is administrative rather than political, likely tied to listing standards for crypto ETFs.
1. Why Did the SEC Pause the GDLC ETF?
- Commissioner Review Needed: The SEC initially approved GDLC through staff-level delegated authority, bypassing a full commission vote. However, the agency later decided to subject the approval to commissioner review, pausing the launch.
- Setting ETF Standards: The SEC may be developing uniform guidelines for future multi-asset crypto ETFs, ensuring consistency in approvals.
- Inclusion of XRP & Cardano: Unlike Bitcoin (BTC) and Ethereum (ETH), which already have spot ETFs, XRP and ADA do not yet have individual ETF approvals. The SEC may be evaluating how to treat such assets in basket-based funds.
2. What’s Inside Grayscale’s GDLC ETF?
The fund tracks the CoinDesk 5 Index, which includes:
- Bitcoin (BTC)
- Ethereum (ETH)
- Solana (SOL)
- XRP (XRP)
- Cardano (ADA)
Notably, Solana (SOL) just gained its first ETF this week, while XRP and ADA ETF applications remain under SEC review.
3. Is This Delay Unusual?
According to Bloomberg Intelligence ETF analyst James Seyffart, the SEC’s pause is “not normal.” Possible reasons include:
- The SEC wants to establish a clear framework for digital asset ETFs before allowing more launches.
- Regulators may be scrutinizing the fund’s structure, particularly how it handles non-Bitcoin/Ethereum assets.
What Happens Next?
- SEC Deadlines Loom: The agency faces upcoming decisions on XRP, ADA, and SOL ETF applications later this year.
- Grayscale’s Response: The firm called the delay “unexpected” but acknowledged the evolving regulatory landscape for digital asset ETFs.
A Temporary Setback?
While the pause may cause short-term uncertainty, it likely reflects the SEC’s effort to refine crypto ETF regulations rather than outright opposition. If resolved, GDLC could pave the way for more multi-asset crypto ETFs in the future.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.