Grayscale has challenged the SEC’s decision to pause the conversion of its Digital Large Cap Fund into an ETF, asserting that the Commission has overstepped its authority.
Conversion of Fund to ETF
Grayscale previously announced plans to convert its Digital Large Cap Fund into an ETF to increase accessibility of crypto assets for investors. However, the SEC issued a stop order on this conversion, which Grayscale contested, arguing that the Commission lacks legal grounds for such action under Section 19b of the Securities Exchange Act.
Legal Appeal and Consequences
Grayscale’s appeal calls for a legal reassessment of the SEC's decision. A favorable outcome could pave the way for similar future requests. Grayscale continues to assert that the SEC does not have the authority to impose such a stop order.
Grayscale's Statement
The company stated, "We believe the SEC does not have the authority to issue such a stop order, and we will continue to defend our view in the legal arena." Grayscale intends to pursue all available legal avenues to challenge the SEC's decision.
The ongoing legal proceedings between Grayscale and the SEC may significantly impact the future of crypto asset regulation and could influence financial products related to cryptocurrencies.
