The U.S. Securities and Exchange Commission (SEC) has paused Grayscale’s plan to convert its Digital Large Cap Fund into a spot ETF, delaying the rollout of a diversified crypto product.
Grayscale ETF Delay
The SEC has halted Grayscale's plan to convert its Digital Large Cap Fund into an ETF, temporarily blocking the rollout of a diversified crypto investment product that includes Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). The fund has approximately $755 million in assets.
Reasons for SEC's Pause
Although SEC staff initially approved the conversion, the agency's commissioners invoked Rule 431 to place the decision under further review. This rule allows any commissioner to suspend staff decisions for closer examination, effectively putting the ETF launch on hold.
Market Implications
The delay does not mean the ETF is dead—it signals a pause and indicates further scrutiny. If approved, Grayscale’s fund would have been the first to provide investors with broad exposure to top digital assets in a single, regulated product. This delay may also stall other similar applications.
The SEC’s decision to pause Grayscale’s Digital Large Cap Fund conversion into an ETF marks a key moment in crypto regulation, highlighting the growing regulatory sensitivity around multi-asset crypto funds.
