Grayscale Fights Back: SEC Faces Heat Over GDLC ETF Approval Delays
Grayscale turns up the pressure on regulators as the SEC drags its feet on crypto ETF approvals—again.
Another day, another delay. Grayscale's latest legal salvo against the SEC highlights the growing tension between crypto innovators and gatekeepers. The digital asset manager isn't waiting quietly for permission to launch its GDLC ETF—it's forcing the conversation.
Wall Street's favorite regulatory tactic? When in doubt, stall. The SEC's hesitation comes as no surprise to industry watchers who've seen this playbook before. Grayscale's move signals dwindling patience with bureaucratic foot-dragging.
Who blinks first? With billions in potential inflows hanging in the balance, this showdown could redefine how regulators approach crypto products. One thing's certain: the old guard's delay-and-deny strategy looks increasingly shaky in the face of determined industry pushback.
Bonus jab: Nothing moves slower than government approvals—except maybe the SEC's understanding of blockchain technology.
TLDR
- Grayscale Fights SEC Over ETF Delay, Cites Missed Legal Deadline
- Bitcoin-Heavy GDLC ETF Faces SEC Hurdle, Grayscale Pushes Back
- Grayscale Slams SEC for Halting Multi-Crypto ETF Past Legal Deadline
- GDLC ETF Standoff: Grayscale Says SEC Delay Breaks Federal Law
- Ethereum, XRP, Solana in Limbo as Grayscale Battles SEC Over ETF
Grayscale has formally contested the U.S. Securities and Exchange Commission’s (SEC) recent MOVE to delay the launch of its Digital Large Cap (GDLC) ETF. The firm argues that the SEC missed a statutory deadline, which automatically deems the ETF approved by law. Grayscale claims the delay disrupts fair market processes and harms its product’s timeline and strategic market entry.
Bitcoin ETF: Procedural Clash Escalates
The proposed GDLC ETF includes Bitcoin, which forms nearly 80% of the fund’s holdings and anchors its performance profile. Grayscale states that the SEC’s stay on approval violates Section 19(b)(2)(D) of the Securities Exchange Act. Under this section, a rule is automatically approved if not formally disapproved within 240 days.
NEW: @Grayscale and their lawyers filed a letter in response to the SEC's "Stay" order on $GDLC's ETF conversion arguing that the SEC didn't have the power to do this. pic.twitter.com/9m1J30eiJb
— James Seyffart (@JSeyff) July 11, 2025
The SEC’s Division of Trading and Markets had approved the ETF under delegated authority on July 1. However, a commissioner called for further review, which placed the approval on hold through Rule 431(e). Grayscale maintains this procedural move does not override federal statutory timelines.
Grayscale emphasizes that the rule proposal was submitted on October 15, 2024, and the 240-day window closed on July 2, 2025. The firm believes the fund should now be considered legally approved. It also insists that the agency’s stay order has no authority to postpone the approval once the deadline has passed.
Ethereum’s Inclusion Strengthens Fund Appeal
Ethereum is the second-largest holding in the GDLC and broadens its portfolio appeal beyond Bitcoin. Grayscale’s ETF aims to offer diversified exposure through a regulated exchange, targeting wider adoption in traditional finance. This approach aligns with the firm’s goal of reshaping crypto access for mainstream market players.
The inclusion of ethereum enhances the fund’s value proposition and signals market maturity. Grayscale sees the ETF structure as a tool for simplifying digital asset access. Despite the SEC delay, the firm says market infrastructure and demand remain strong.
Ethereum’s growing role in decentralized finance adds strategic weight to its ETF placement. Grayscale argues that regulatory uncertainties should not undermine its structured offerings. The company urges timely SEC decisions to uphold market confidence and legal standards.
XRP Faces Regulatory Uncertainty Yet Stays in Fund
Despite its legal challenges with the SEC, XRP remains part of the GDLC. Grayscale has kept the asset in the fund, citing its market cap and liquidity. The company believes inclusion reflects objective asset-ranking criteria rather than subjective regulatory status.
The ETF structure does not imply endorsement of any asset’s legal classification. Grayscale stresses that XRP contributes to the fund’s diversified composition. Its place in the basket supports exposure to key large-cap digital assets.
Regulatory scrutiny has made XRP controversial, but its market performance keeps it relevant in multi-asset portfolios. Grayscale highlights transparency in its selection model and calls on regulators to avoid mixed signals that confuse the market.
Solana and Cardano Add to Broader Market Strategy
Solana and Cardano round out the GDLC’s holdings, adding scale and blockchain diversity to the portfolio. Grayscale includes them to capture long-term sector trends and reduce single-asset concentration. Both assets reflect growing developer activity and user adoption.
Currently, Solana has limited ETF representation, while cardano has none in the U.S. market. Grayscale aims to fill that gap by offering comprehensive exposure. The GDLC would become the first multi-crypto ETF if approved.
Grayscale sees the multi-asset structure as a competitive advantage in a crowded digital asset market. The firm views these additions as essential for future-proofing the ETF. It reiterates that delays damage market progress and contradict established legal processes.
