SEC Temporarily Stops Grayscale’s New Crypto ETF Launch, Even After Giving Initial Approval

SEC Temporarily Freezes Grayscale’s Crypto ETF Plan

Grayscale’s plan to turn its Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF) has been paused, even though the U.S. Securities and Exchange Commission (SEC) approved it on July 1.

ETF expert James Seyffart said on July 2 that a “stay order” is blocking the launch for now. The SEC didn’t say when it would lift the pause.

Why the Delay?

Seyffart offered two possible reasons:

1. Another division of the SEC might still be reviewing the fund’s structure.
2. The SEC may want to wait until it creates broader rules for all crypto ETFs before allowing any new ones to launch.

Another analyst, Eric Balchunas, suggested that the SEC might be waiting for single-asset ETFs — like those for Solana, Cardano, and XRP — to launch first, before approving Grayscale’s multi-crypto ETF.

What’s in Grayscale’s Fund?

Grayscale’s GDLC includes:

• Bitcoin (BTC)
• Ethereum (ETH)
• Solana (SOL)
• XRP
• Cardano (ADA)

The fund currently manages about $775 million in assets. Once the freeze is lifted, GDLC will change from a closed-end fund to an open ETF, making it easier to buy and sell.

New Rules Could Make Things Easier

Reports say the SEC is working with U.S. stock exchanges on new, simpler rules for crypto ETFs. These rules would:

• Allow a faster approval process
• Let issuers skip the complex paperwork required now
• Set clear standards for things like trading volume and liquidity

Seyffart said this would be “very good news” for the crypto market.

Other companies — like Bitwise, Hashdex, and Franklin Templeton — also have crypto fund applications waiting for SEC approval.

If the SEC is planning to use the same new rules for all crypto ETFs, it might be holding back GDLC to approve all of them together.

One important date to watch: The SEC must decide on Bitwise’s application by July 31, which could be when the new rules are revealed.