SEC Pauses Grayscale Large Cap Fund ETF Approval for Review

The U.S. Securities and Exchange Commission (SEC) has put a hold on the approval of Grayscale’s Digital Large Cap Fund (GDLC) conversion into an exchange-traded fund (ETF), announced via a letter dated July 1, 2025. Initially approved by SEC staff through delegated authority, the decision is now under review by the full commission, stalling the fund’s planned listing on NYSE Arca.

Details of the Pause

The GDLC, managing $755 million in assets including Bitcoin, Ethereum, XRP, Solana, and Cardano, was set to become a spot ETF benchmarked to the CoinDesk 5 Index. The SEC’s stay, effective until further notice, reflects a reassessment of the earlier staff-level approval, raising questions about regulatory oversight of multi-asset crypto ETFs.

Implications and Context

This unexpected review comes shortly after the initial approval, suggesting heightened scrutiny of crypto investment products. It may delay the fund’s launch and impact investor confidence, especially as the crypto market navigates regulatory uncertainties. The SEC’s move could signal a cautious approach to expanding regulated crypto offerings beyond Bitcoin and Ethereum.

What’s Next?

The outcome of the commission’s review remains unclear, with no timeline provided. This development highlights the evolving regulatory landscape for digital assets, potentially influencing future ETF approvals and the broader adoption of cryptocurrencies in traditional finance.