It solely took someday for the US Securities and Alternate Fee (SEC) to stroll again on an approval given to Grayscale Digital Massive 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 evaluate the latest 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 Follow to evaluate its earlier choice.
Breaking information from yesterday and ideas
– Regardless of preliminary clearance from the SEC, it not too long ago hit pause on plans to transform Grayscale’s Digital Massive Cap Fund into an ETF
The momentary pause doesn’t essentially imply denial, it’ll set off additional evaluate, to evaluate: Market… https://t.co/apyNUx2D62
— Salazar.eth
(@0xSalazar) July 3, 2025
The GDLC fund holds $755 million in Bitcoin, Ethereum, Solana, XRP and Cardano. In keeping with some analysts, the SEC’s company employees signed off on the approval quite 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 inform you that, pursuant to Rule 431 of the Fee’s Guidelines of Follow, 17 CFR 201.431, the Fee will evaluate the delegated motion.”
Moreover, it confirmed, “In accordance with Rule 431(e), the July 1, 2025, order is stayed till the Fee orders in any other case.”
Discover: 20+ Subsequent Crypto to Explode in 2025
Altcoin Publicity Attracts Uncommon SEC Evaluate of the Grayscale ETF Software
The GDLC fund, launched in 2018, consists of quite a lot of cryptocurrencies, with greater than 91% of its holdings invested in Ethereum and Bitcoin. The remainder is made up of altcoins similar to XRP, Solana and Cardano.
Additionally, the GDLC consists of established cryptocurrencies based mostly on their market measurement and adjusts each quarter to match modifications. If permitted, the GDLC will develop into a public ETF that lets buyers maintain a number of crypto property in a single place.
Traditionally, such reversals are unusual. They typically sign ongoing inside debates on investor safety, managing regulatory consistency and market stability. Altcoins, posing various levels of threat, may have been the set off for the SEC commissioners to renege on the staff-level approval.
The inclusion of property like XRP and Solana, whose standing continues to be up for debate, could have raised issues concerning the authorized therapy of the underlying tokens and the readability of disclosure as multi-asset merchandise, similar to Grayscale’s, add extra ranges of structural and authorized complexity, in distinction to single-asset ETFs.
Discover: 10+ Crypto Tokens That Can Hit 1000x in 2025
Bloomberg Analyst Thinks SEC is Reassessing Grayscale ETF to Develop Clearer Guidelines
Some analysts, similar to Bloomberg’s Eric Balchunas, imagine 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 could possibly’t launch till in any other case notified. Undecided why, no different information than this letter. My guess tho: They need to problem the crypto ETP itemizing requirements earlier than any ’33 act spot ETFs hit market with these different cash. So probably… https://t.co/Za7rYk1o0E
— Eric Balchunas (@EricBalchunas) July 2, 2025
Discover: High Solana Meme Cash to Purchase in July 2025
Key Takeaways
The GDLC fund holds $755m in Bitcoin, Ethereum, Solana, XRP and Cardano
Bitcoin and Ethereum make up greater than 91% of the GDLC fund’s portfolio
Multi-asset merchandise, similar to Grayscale’s, add extra ranges of structural and authorized complexity in distinction to single-asset ETFs
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