Grayscale Calls SEC Trading Pause on ETF Holding Solana, XRP ‘Unexpected’

Crypto asset supervisor Grayscale referred to as the U.S. Securities and Change Fee’s choice to halt the discharge of its Digital Massive Cap Fund “surprising” in an e-mail to Decrypt Thursday. 

The agency stated that the Wednesday choice by the regulator—which shocked business observers—was proof of a altering regulatory panorama. 

“Whereas this improvement was surprising, it displays the dynamic and evolving nature of the regulatory panorama surrounding a first-of-its-kind digital asset product like GDLC,” Grayscale stated.

The SEC had fast-tracked the conversion of Grayscale’s GDLC fund, which focuses on Bitcoin however would give buyers publicity to Ethereum, Solana, XRP, and Cardano, into an exchange-traded fund. However the regulator additionally connected a word saying it might not but permit the product to start out buying and selling. 

Grayscale added: “Grayscale stays dedicated to pursuing the itemizing of GDLC as an exchange-traded product and we’re working intently with key stakeholders to satisfy all essential necessities. We’ll present additional updates as further info turns into obtainable.”

Grayscale’s Massive Cap fund is modeled on the CoinDesk 5 Index, which measures the efficiency of the 5 largest and most liquid digital property. Bitcoin composes greater than 80% of the fund’s holdings. Round 11% of the ETF’s property are in Ethereum, with 2.8% in Solana, 4.8% in XRP, and 0.8% in Cardano, in keeping with the SEC submitting.



Though the SEC rejected a number of spot Bitcoin ETF functions for greater than a decade, the regulator acted comparatively rapidly in broadening buyers’ entry by way of GDLC. It accepted Grayscale’s software a day earlier than it confronted a deadline for its choice, whereas prior to now, it had rejected Grayscale’s functions on the final minute.

GDLC goals to commerce as a full-fledged ETF on NYSE Arca. Amongst Grayscale’s funds, the asset supervisor has beforehand transformed its Bitcoin and Ethereum trusts. As closed-end funds, the merchandise traded at a reduction or premium relative to the worth of their underlying holdings, attributable to provide and demand imbalances that stemmed from the funds’ buildings.

The SEC signaled on Tuesday that it is receptive to funds that dedicate most of their funds towards established cryptocurrencies like Ethereum and Bitcoin, with others within the combine, however it has but to greenlight ETF functions that focus solely on smaller altcoins. 

Grayscale sued the SEC over repeated denials to transform its Grayscale fund right into a full-fledged ETF in 2023. Its courtroom victory, wherein an appellate court docket took subject with the regulator’s logic for denials, contributed to the SEC’s approval of spot Bitcoin ETFs final 12 months.

These BTC funds have debuted to dramatic success, producing practically $50 billion in investments. Spot Ethereum funds have netted about $4 billion in property. 

Edited by James Rubin