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SEC Halts Grayscale Large Cap Fund Conversion for 'Review' a Day After Staff Approval
The SEC's commissioners are reviewing Grayscale's uplisting of a large cap fund, a letter from the agency said.
Updated Jul 3, 2025, 6:34 p.m. Published Jul 2, 2025, 7:50 p.m.
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What to know:
- The SEC's commissioners are reviewing the regulator's recent approval of the Grayscale Digital Large Cap Fund's conversion into an exchange-traded product, the SEC said.
- The SEC okayed the conversion earlier this week.
The U.S. Securities and Exchange Commission's leaders are reviewing the agency's recent approval of a Grayscale effort to convert a fund into an exchange-traded fund (ETF), a letter dated July 1 said.
The SEC allowed Grayscale to uplist the Digital Large Cap Fund (GDLC), which holds $755 million in bitcoin , Ethereum , XRP , Solana and Cardano , into an ETF through delegated authority — meaning the SEC's commissioners did not vote to approve the conversion, but rather agency staff gave the sign-off.
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"This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action," the letter, addressed to the New York Stock Exchange, said. "In accordance with Rule 431(e), the July 1, 2025 order is stayed until the Commission orders otherwise."
The SEC said it would let the NYSE know "of any pertinent action taken by the Commission."
Any commissioner can ask that an SEC action be reviewed. In the past, commissioners have asked to review ETF disapprovals, for example. The letter did not indicate which commissioner or commissioners asked for the review.
GDLC is benchmarked to CoinDesk's CoinDesk 5 Index.
A spokesperson for the NYSE did not immediately return a request for comment.
In a statement, a spokesperson for Grayscale said, “Following the SEC’s approval of NYSE Arca’s 19b-4 filing for GDLC, the Commission subsequently issued a notice indicating its intent to review the approval and imposed a stay on the order. While this development was unexpected, it reflects the dynamic and evolving nature of the regulatory landscape surrounding a first-of-its-kind digital asset product like GDLC. Grayscale remains committed to pursuing the listing of GDLC as an ETP and we are working closely with key stakeholders to meet all necessary requirements. We will provide further updates as additional information becomes available.”
An SEC spokesperson declined to comment on the letter.
UPDATE (July 2, 2025, 20:05 UTC): Adds additional detail, SEC declining to comment.
UPDATE (July 3, 2025, 18:35 UTC): Adds Grayscale statement.
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