US SEC has paused the launch process for the Grayscale Digital Large Cap fund, which contains Solana, XRP, Cardano, Bitcoin, and Ethereum.
The United States Securities and Exchange Commission (SEC) will not be taking any action on Grayscale’s Exchange Traded Fund filing for Solana SOL $152.6 24h volatility: 0.1% Market cap: $81.46 B Vol. 24h: $4.47 B , XRP XRP $2.26 24h volatility: 1.1% Market cap: $133.34 B Vol. 24h: $3.20 B , Cardano ADA $0.60 24h volatility: 2.4% Market cap: $21.68 B Vol. 24h: $728.81 M , Bitcoin BTC $109 614 24h volatility: 0.6% Market cap: $2.18 T Vol. 24h: $29.42 B , and Ethereum ETH $2 592 24h volatility: 0.7% Market cap: $312.77 B Vol. 24h: $19.45 B .
There are suspicions that the regulator may want to implement guidelines for crypto ETF before progressing with Grayscale’s application.
Disagreement in SEC Regulatory Divisions?
Although the US SEC approved a rule change to allow the Grayscale Digital Large Cap Fund (GDLC) to be listed and traded as a spot ETF on NYSE Arca, it is not time to celebrate.
Shortly after, the US regulator placed an indefinite pause on an order approving the trading of a Grayscale fund.
Dubbed the Grayscale Digital Large Cap Fund, the ETF contains SOL, XRP, ADA, BTC, and ETH. Its weighting is nearly 80% Bitcoin, about 12% Ethereum, with less than 5%, 3%, and 1% exposure to XRP, Solana, and Cardano, respectively.
According to an earlier order, the Commission may have a good cause to approve ETF conversion for the product on an accelerated basis.
However, a letter was attached to the order stating that the leadership of the SEC is pausing the order indefinitely, “until the Commission orders otherwise.”
Notably, James Seyffart, the Senior Bloomberg ETF analyst, was the first to point out the document. Other experts and market watchers have attempted to formulate a theory as to why the regulator made this move.
UPDATE: While @Grayscale was given an approval order for their conversion of $GDLC into an ETF yesterday. There was a letter attached to that approval that is putting a Stay on their ability to actually convert at this time. pic.twitter.com/AiEp5tLOou
— James Seyffart (@JSeyff) July 2, 2025
Among the identified readings is how the SEC likely wants to ensure that it has an approved framework for crypto ETFs before approving any asset manager.
Seyffart even believes the commission likely didn’t want to reject Grayscale’s GDLC ETF application before the current deadline.
Based on this, the Bloomberg analyst supports the view that the SEC is currently developing an internal framework for issuing digital asset ETFs. His colleague, Eric Balchunas, shares the same opinion.
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
Approving the Grayscale GDLC ETF product in one agency document and then pausing on the approval in another is suspected to be a matter of internal politics.
To put this in perspective, the first order was from the SEC’s Division of Trading and Markets. There are suspicions that the second letter may have been from another division.
Where Does SEC Stand on Crypto ETFs?
So far, none of these theories has been proven to be even slightly correct. “[GDLC] can’t convert yet, but it will,” Seyffart noted on Wednesday. “We just don’t know when, and we don’t exactly know why the SEC issued this ‘stay’ order.”
In other altcoin news, the REX-Osprey Solana Staking ETF (SSK) went live for trading recently after receiving approval from the SEC. This is the US’s first Solana staking ETF, and it roared into its debut with $12 million in inflows and $33 million in trading volume on its first day.
This ETF is listed on the Cboe BZX Exchange, providing investors with direct exposure to SOL and staking yields. Meanwhile, there are several altcoin ETF applications still awaiting the SEC’s decision.
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