SEC Halts Grayscale's Altcoin ETF Basket in Unexpected Decision

The U.S. Securities and Exchange Commission (SEC) has unexpectedly halted Grayscale Investments' plan to convert their Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), causing uncertainty for future crypto-based exchange-traded products. Previously, the SEC had approved the conversion, marking it as a significant step towards creating regulated ETFs with exposure to major cryptocurrencies.

However, a letter from Deputy Secretary J. Matthew DeLesDernier revealed the decision was under review and Grayscale's conversion was stayed. Analyst James Seyffart suggests the delay could be due to internal coordination issues within the SEC or a hold for a more comprehensive regulatory structure for crypto ETFs. Despite the setback, industry watchers believe the delay will only be temporary.