SEC Slams Brakes on Grayscale ETF: Approval Now in Regulatory Limbo

The crypto world got whiplash this week as the SEC abruptly reversed course on Grayscale's ETF—just when markets thought it was a done deal.

Regulatory whiplash strikes again

Sources confirm the SEC has quietly shelved its decision indefinitely, sending analysts scrambling to update their "definitely-this-time-for-real" crypto adoption timelines. The move comes after months of backroom debates about Bitcoin's volatility—apparently Wall Street only likes unpredictable price swings when they're engineered by Fed statements.

Grayscale's legal team now faces their greatest challenge yet: waiting longer than a crypto trader's attention span. Meanwhile, Bitcoin barely flinched on the news—proof the market stopped caring about SEC theatrics around the 20th delay.

Funny how traditional finance always needs 'more time' to understand technology that's been running flawlessly for 16 years. Maybe they're waiting for a blockchain to file the paperwork?

The GDLC fund holds $755 million in Bitcoin, Ethereum, Solana, XRP and Cardano. According to some analysts, the SEC’s agency staff signed off on the approval rather than the commissioners, hence the call back.

In its letter addressed to the New York Stock Exchange (NYSE), the SEC said, “This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action.”

Additionally, it confirmed, “In accordance with Rule 431(e), the July 1, 2025, order is stayed until the Commission orders otherwise.”

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Altcoin Exposure Draws Rare SEC Review of the Grayscale ETF Application

The GDLC fund, launched in 2018, includes a variety of cryptocurrencies, with more than 91% of its holdings invested in ethereum and Bitcoin. The rest is made up of altcoins such as XRP, Solana and Cardano.

Also, the GDLC includes established cryptocurrencies based on their market size and adjusts every quarter to match changes. If approved, the GDLC will become a public ETF that lets investors hold several crypto assets in one place.

Historically, such reversals are uncommon. They often signal ongoing internal debates on investor protection, managing regulatory consistency and market stability. Altcoins, posing varying degrees of risk, could have been the trigger for the SEC commissioners to renege on the staff-level approval.

The inclusion of assets like XRP and Solana, whose status is still up for debate, may have raised concerns regarding the legal treatment of the underlying tokens and the clarity of disclosure as multi-asset products, such as Grayscale’s, add additional levels of structural and legal complexity, in contrast to single-asset ETFs.

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Bloomberg Analyst Thinks SEC is Reassessing Grayscale ETF to Develop Clearer Rules

Some analysts, such as Bloomberg’s Eric Balchunas, believe that the SEC is reassessing the Grayscale ETF to develop clearer rules before allowing more complex crypto funds. Baluchnas also speculates that the regulatory body is waiting to set consistent standards for crypto investment products before giving the green signal to GDLC’s ETF.

The plot thickens. Upper level of SEC telling $GDLC it can't launch until otherwise notified. Not sure why, no other info than this letter. My guess tho: They want to issue the crypto ETP listing standards before any '33 act spot ETFs hit market with these other coins. So likely… https://t.co/Za7rYk1o0E

— Eric Balchunas (@EricBalchunas) July 2, 2025

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Key Takeaways

• The GDLC fund holds $755m in Bitcoin, Ethereum, Solana, XRP and Cardano


• Bitcoin and Ethereum make up more than 91% of the GDLC fund’s portfolio


• Multi-asset products, such as Grayscale’s, add additional levels of structural and legal complexity in contrast to single-asset ETFs