Cryptocurrency asset manager Grayscale has appealed the U.S. Securities and Exchange Commission's (SEC) decision to halt trading of its ETF containing XRP, Solana, Bitcoin, and other cryptocurrencies.
Reasons for Grayscale's Appeal
Grayscale stated that the delay in starting trading of the ETF is harming its investors. In an official letter to the SEC, they pointed out: "The exchange and the fund's existing investors are being harmed by the delay in the fund's commencement of public trading." Grayscale also noted that it may pursue legal actions if necessary.
Characteristics and Composition of the ETF
The SEC approved the Grayscale Digital Large Cap Fund (GDLC) ETF on July 1. However, trading was halted the same week, citing the need for further scrutiny of the product. Grayscale argues that this move violates timeframes established by Congress. According to SEC filings, 80% of the GDLC fund is comprised of Bitcoin, 11% is Ethereum, followed by Solana at 2.8%, XRP at 4.8%, and Cardano at 0.8%. The ETF would trade on NYSE Arca under the ticker symbol 'GDLC.'
SEC's Response and Potential Actions from Grayscale
Grayscale emphasizes that the SEC's internal regulatory rules cannot be used to circumvent a law established by Congress. This highlights the importance of adhering to the timeframes for the start of ETF trading.
The Grayscale vs. SEC case raises important questions about cryptocurrency regulation and investors' rights to access investment instruments. Developments are ongoing, and the company is prepared to utilize all available legal avenues.
