Grayscale Digital Large Cap Fund was approved on Tuesday to be officially converted into an ETF and listed for trading, but it was forced to put the brakes on the next day. The U.S. Securities and Exchange Commission (SEC) sent a letter to the New York Stock Exchange (NYSE) on Wednesday, announcing that it would suspend the listing process of the fund and initiate a review, which caused a shock in the market.
According to the letter, U.S. SEC Deputy Secretary J. Matthew DeLesDernier pointed out that although the Commission's "Division of Trading and Markets" approved the conversion of the "Grayscale Digital Large Cap Fund" into an ETF on July 1, this order will be "suspended" from now on (Rule 431 (e)) until the SEC makes further resolution.
In other words, this fund was "sent home just after getting its foot in the door." The letter emphasized that once the SEC takes any relevant action, the Secretariat will notify you separately.
This application was approved on Tuesday through "accelerated review". The market originally expected that it would be another successfully transformed flagship product of Grayscale Investments after GBTC and ETHE. However, it was unexpectedly stopped by the SEC the next day.
The "Grayscale Digital Large Cap Fund" is currently still a closed-end product, and can only be bought and sold by qualified investors through over-the-counter (OTC) transactions. The asset allocation is centered on Bitcoin, accounting for nearly 80%; about 11% is Ethereum; the rest covers mainstream competing currencies such as Solana (SOL), Cardano (ADA) and Ripple (XRP).
Grayscale Investments has not yet responded to external inquiries; the U.S. SEC is unwilling to comment on individual applications.
Currently, the SEC still has a large number of cryptocurrency spot ETF applications on hand, covering popular assets such as SOL, XRP and even Dogecoin (DOGE), and the review progress has attracted much attention from the market.
"The release was halted just one day later! The US SEC halted the transformation of Grayscale Digital Large Cap Fund into an ETF." This article was first published on (Block Guest).
