SEC halts Grayscale’s multi-crypto ETF approval process
Fund includes Bitcoin, Ethereum, XRP, Solana, and Cardano
Review delays potential launch of diversified crypto ETFs
SEC Steps In to Review Grayscale’s ETF Conversion
The U.S. Securities and Exchange Commission (SEC) has paused Grayscale’s plan to convert its Digital Large Cap Fund into a spot ETF. This move temporarily blocks the rollout of a diversified crypto investment product that includes five major digital assets: Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). The fund, with roughly $755 million in assets, was set to be listed on the NYSE Arca.
Although SEC staff initially approved the conversion, the agency’s commissioners invoked Rule 431 to place the decision under further review. This rule allows any commissioner to suspend staff decisions for closer examination, effectively putting the ETF launch on hold.
Why the SEC Is Pausing Multi-Crypto ETFs
Unlike single-asset ETFs such as those tracking Bitcoin or Ethereum, the Grayscale Digital Large Cap Fund includes multiple crypto assets. This raises additional regulatory questions about:
Custody and valuation of varied assets
Market surveillance for altcoins like XRP, SOL, and ADA
Investor protection in a rapidly evolving market
The SEC’s action reflects broader concerns about the risks and oversight required for ETFs that span across multiple blockchain projects.
What This Means for the Market
The decision doesn’t mean the ETF is dead—it’s a delay that signals deeper scrutiny. Grayscale’s fund, if approved, would have been the first to give investors broad exposure to top digital assets in a single, regulated product. Its delay may also stall other similar applications in the pipeline.
This pause underlines how the SEC is taking a cautious approach to approving complex crypto financial products. It also reflects the agency’s desire to build a more robust regulatory framework before allowing such offerings into mainstream markets.
JUST IN: The SEC pauses Grayscale's Digital Large Cap Fund conversion into an ETF covering $BTC, $ETH, $XRP, $SOL and $ADA, placing it under further review. pic.twitter.com/ccS8WO5qAL
— Cointelegraph (@Cointelegraph) July 2, 2025
Final Thoughts
The SEC’s decision to pause Grayscale’s Digital Large Cap Fund conversion into an ETF represents a key moment in crypto regulation. While not a denial, it highlights growing regulatory sensitivity around multi-asset crypto funds. The final outcome will shape the direction of diversified crypto ETFs and influence how digital assets are integrated into traditional finance.
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