The US SEC has abruptly frozen the approval of the Grayscale Digital Large Cap Fund’s conversion into an exchange-traded fund, halting its launch just a day after the green light was given.
On July 1, the SEC’s Division of Trading and Markets approved the NYSE Arca’s proposal to list and trade shares of the Grayscale fund under an amended rule.
Altcoins such as XRP, Solana and Cardano make up the rest, each carrying differing degrees of regulatory uncertainty. vBy intervening directly, the SEC’s commissioners have signaled that the conversion merits closer inspection beyond what staff-level approval typically requires.
Launched in 2018, the Grayscale Digital Large Cap Fund holds a basket of top cryptocurrencies, with Bitcoin and Ethereum accounting for more than 91% of its portfolio.
Bloomberg’s Eric Balchunas has suggested the SEC is holding off on GDLC’s ETF conversion until a more consistent regulatory framework for crypto ETPs is in place.
Some analysts believe the Commission’s caution could reflect a broader effort to establish a unified approach before opening the gates to more diversified crypto products.