Grayscale urges SEC to allow the launch of its multi-crypto fund, citing harm to investors
Grayscale is pushing back against the U.S. Securities and Exchange Commission's decision to put a pause on its multi-crypto fund and says investors are "suffering harm" due to the delay.
In a letter sent this week to the SEC's Division of Trading and Markets director, secretary, and acting general counsel, Grayscale's lawyers urged the agency to adhere to rules enacted by Congress that create deadlines for approval for products like the Grayscale Digital Large Cap Fund LLC.
Grayscale's lawyers now say the firm is considering filing a petition asking the stay to be lifted.
"Grayscale, the Exchange and the Fund’s current investors are suffering harm as a result of the delay in public launch of the Fund, and Grayscale and the Exchange are therefore considering whether to file a petition requesting the Commission to lift the stay imposed by Rule 431(e) while the Commission reviews the action taken by delegated authority, so that the Fund may promptly launch while that review proceeds," the lawyers said.
"We therefore respectfully request that the Office of the Secretary promptly notify the Exchange that, notwithstanding the July 1, 2025 stay of the Division of Trading and Market’s order, the Proposal was deemed approved by the Commission on July 2, 2025, as provided in Section 19(b)(2)(D) of the Exchange Act," they added.
An SEC spokesperson declined to comment.
Last week, the SEC approved Grayscale's proposal to convert the fund into an ETF on an "accelerated basis." The fund trades over the counter and is composed primarily of Bitcoin at almost 80% and Ethereum at about 11%. Solana, Cardano, and XRP are also represented with single-digit percentages, according to its website.
However, a day later, the agency put a pause on it. In a letter sent to the New York Stock Exchange about the fund, SEC Deputy Secretary J. Matthew DeLesDernier said the agency's Division of Trading and Markets granted that approval, but said the commission would review it.
The SEC is currently considering a stack of crypto ETF proposals from those tracking XRP to PENGU to DOGE amid a friendlier regulatory environment for crypto since President Donald Trump took office earlier this year. Some have signaled that approval of the Grayscale Digital Large Cap ETF could signal a greenlight for other pending proposals.
Grayscale urges SEC to allow the launch of its multi-crypto fund, citing harm to investors
Grayscale is pushing back against the U.S. Securities and Exchange Commission's decision to put a pause on its multi-crypto fund and says investors are "suffering harm" due to the delay.
In a letter sent this week to the SEC's Division of Trading and Markets director, secretary, and acting general counsel, Grayscale's lawyers urged the agency to adhere to rules enacted by Congress that create deadlines for approval for products like the Grayscale Digital Large Cap Fund LLC.
Grayscale's lawyers now say the firm is considering filing a petition asking the stay to be lifted.
"Grayscale, the Exchange and the Fund’s current investors are suffering harm as a result of the delay in public launch of the Fund, and Grayscale and the Exchange are therefore considering whether to file a petition requesting the Commission to lift the stay imposed by Rule 431(e) while the Commission reviews the action taken by delegated authority, so that the Fund may promptly launch while that review proceeds," the lawyers said.
"We therefore respectfully request that the Office of the Secretary promptly notify the Exchange that, notwithstanding the July 1, 2025 stay of the Division of Trading and Market’s order, the Proposal was deemed approved by the Commission on July 2, 2025, as provided in Section 19(b)(2)(D) of the Exchange Act," they added.
An SEC spokesperson declined to comment.
Last week, the SEC approved Grayscale's proposal to convert the fund into an ETF on an "accelerated basis." The fund trades over the counter and is composed primarily of Bitcoin at almost 80% and Ethereum at about 11%. Solana, Cardano, and XRP are also represented with single-digit percentages, according to its website.
However, a day later, the agency put a pause on it. In a letter sent to the New York Stock Exchange about the fund, SEC Deputy Secretary J. Matthew DeLesDernier said the agency's Division of Trading and Markets granted that approval, but said the commission would review it.
The SEC is currently considering a stack of crypto ETF proposals from those tracking XRP to PENGU to DOGE amid a friendlier regulatory environment for crypto since President Donald Trump took office earlier this year. Some have signaled that approval of the Grayscale Digital Large Cap ETF could signal a greenlight for other pending proposals.
