The U.S. Securities and Alternate Fee probably halted the launch of the Grayscale Digital Massive Cap Fund (GDLC) for administrative causes, not political ones, a number of people acquainted with the matter advised CoinDesk.
The SEC permitted GDLC to uplist as an exchange-traded fund (ETF) on Tuesday by means of staffers’ delegated authority, that means the regulator’s commissioners didn’t must vote on the appliance. However, the regulator knowledgeable Grayscale and the New York Inventory Alternate — GDLC’s itemizing companion — on Wednesday that the SEC’s commissioners will evaluation the approval, pausing GDLC’s go-live date within the meantime.
GDLC is predicated on CoinDesk Indices’ CoinDesk 5 Index.
Halting the launch provides the SEC time to develop itemizing requirements for different ETFs that may launch beneath the identical mechanism, the people mentioned.
There’s additionally the truth that GDLC comprises two digital belongings — XRP
and Cardano — that do not at the moment have their very own particular person ETFs. Two of the opposite belongings within the basket, Bitcoin and Ethereum , have had their very own ETFs since 2024, and the SEC has even beforehand okayed funds containing each of these belongings. Solana additionally noticed its first ETF launch earlier this week, although functions for different ETFs tied to the asset stay beneath SEC evaluation.
The SEC faces deadlines later this 12 months for the XRP, ADA and SOL functions.
James Seyffart, Bloomberg Intelligence ETF analyst, advised CoinDesk that the SEC’s pause was “not regular.” In a submit on X, he wrote that there are two potential causes behind the transfer.
“The SEC would not wish to let something to launch beneath the 19b-4 course of till they formally approve or give you some framework for digital belongings within the ETF wrapper.” The opposite possibility, he wrote, is that the SEC needs to work on one thing in relation to a selected facet of the fund itself, for instance the construction.
In a press release, a Grayscale spokesperson mentioned the SEC’s pause “was sudden” however “displays the dynamic and evolving nature of the regulatory panorama surrounding a first-of-its-kind digital asset product like GDLC.”
“Grayscale stays dedicated to pursuing the itemizing of GDLC as an ETP and we’re working carefully with key stakeholders to satisfy all obligatory necessities. We’ll present additional updates as extra data turns into obtainable,” the spokesperson mentioned.
An 8-Okay submitting from Grayscale mentioned the agency “stays dedicated to pursuing the itemizing of the Fund on NYSE Arca and continues to work carefully with key stakeholders to acquire approval of the appliance.”