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Grayscale Challenges SEC Delay on Digital Large Cap Fund
Grayscale Investment Management is urging the U.S. Securities and Exchange Commission (SEC) to cease its delay of the Digital Large Cap Fund’s debut, arguing the delay harms investors.
- The SEC placed a temporary stay on the fund’s launch last week.
- Grayscale considered filing a petition Monday to compel the regulator to allow the fund to begin trading.
- The fund holds Bitcoin (80%), Ethereum (11%), Solana (2.8%), XRP (4.8%) and Cardano (0.8%).
The Delaware-based asset manager first wrote to SEC Chairman Gary Gensler on July 8 urging the regulator to permit its debut. Grayscale contended that the two-week delay has caused its customers financial harm and that the SEC’s actions circumvent statutory timelines.
According to SEC filing data, the proposed fund’s assets would be predominantly Bitcoin, contributing 80% of its holdings. Ethereum represents 11%, while Solana (2.8%), XRP (4.8%), and Cardano (0.8%) complete the portfolio.
The Digital Large Cap Fund is set to begin trading on NYSE Arca under the ticker symbol GDLC. Grayscale points out the stark contrast with 2023, when the SEC granted rapid approvals for spot Bitcoin and Ethereum ETFs.
The conflict touches upon the SEC’s interpretation of securities law regarding exchange-traded products backed by digital assets. “The Commission’s internal housekeeping rules cannot be used to skirt an act of Congress,” argued Grayscale counsel Romiliv Bhandari.
This legal challenge exemplifies the persistent barriers regulators pose to institutional investment in digital assets, contrasting sharply with the swift approval seen for major cryptos.
