SEC To Review Grayscale GDLC ETF Approval, Stays Conversion Order

HomeNews* The U.S. Securities and Exchange Commission (SEC) is reviewing its staff’s approval to convert Grayscale’s Digital Large Cap Fund into an exchange-traded fund (ETF).

• The review involves Grayscale’s fund, which holds about $755 million in several cryptocurrencies including Bitcoin, Ethereum, XRP, Solana, and Cardano.
• The initial approval used “delegated authority,” meaning SEC staff—not the full commission—authorized the fund’s move to ETF status.
• The SEC notified the New York Stock Exchange (NYSE) that the delegated approval is now stayed as the commission conducts its review.
• No details were given regarding which commissioner requested the review, and neither Grayscale nor the NYSE responded to requests for comment. The SEC announced on July 1 that it will review its recent approval allowing Grayscale to list its Digital Large Cap Fund (GDLC) as an ETF on the New York Stock Exchange. The move comes after the fund, which manages approximately $755 million in assets—mainly Bitcoin, Ethereum, XRP, Solana, and Cardano—was previously cleared to convert into an ETF through a process called delegated authority.

• Advertisement - This process, according to the SEC’s letter to the NYSE, allows agency staff to make decisions without a formal vote from SEC commissioners. Following this delegated sign-off, the commission now states it will review the decision under Rule 431, leaving the July 1, 2025 order suspended until further notice.

The SEC wrote, “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,” and clarified that the approval is stayed until future notice from the commission. Further, the SEC said it would inform the NYSE of any relevant action taken during this review period.

Individual SEC commissioners hold the right to request such reviews. While the letter did not name any specific commissioner who initiated this review, similar requests have occurred in the past for other ETF proposals. GDLC, the fund under consideration, tracks the CoinDesk 5 Index.

Spokespeople for Grayscale and the NYSE did not immediately comment, and an SEC representative also declined to provide additional information. The situation remains fluid as the commission reassesses its previous staff decision.

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