Grayscale calls SEC's suspension of ETF trading holding Solana, XRP a 'surprise'

On Wednesday, the SEC suspended the approval order for trading Grayscale's ETF, which holds assets such as Bitcoin, Ethereum, Solana, XRP, and $ADA . Grayscale called this a 'surprising development', indicating the dynamism and evolution of the regulatory framework for a pioneering digital asset product like GDLC.

Grayscale's GDLC fund is built on the CoinDesk 5 Index, which measures the performance of the five largest and most liquid digital assets. Bitcoin accounts for over 80% of the fund's assets, while Ethereum makes up about 11%, Solana 2.8%, $XRP 4.8%, and Cardano 0.8%.

Previously, the SEC had rejected many spot Bitcoin ETF applications for over a decade. However, the agency acted relatively quickly to expand investor access through GDLC, approving Grayscale's application a day before the deadline.

This decision comes after Grayscale sued the SEC in 2023 for continuously refusing to convert the Grayscale Bitcoin Trust (GBTC) into a spot ETF. Grayscale's court victory contributed to the SEC approving spot Bitcoin ETFs last year, which successfully attracted nearly $50 billion in investments. Spot Ethereum funds have also raised about $4 billion in assets.

The SEC signaled on Tuesday that they are accepting funds primarily focused on established cryptocurrencies like Ethereum and Bitcoin, along with other coins, but have yet to greenlight applications for ETFs focused solely on smaller altcoins.