Grayscale Asset Management has recently raised concerns regarding the US Securities and Exchange Commission (SEC) decision to halt the application process for converting the Digital Large Cap Fund (DLCF) into an exchange-traded fund (ETF). This decision by the SEC has sparked controversy, as Grayscale argues that the application had already been approved by the SEC staff prior to the sudden stay.
The SEC’s decision to freeze the application came shortly after its staff had initially approved it, leaving Grayscale puzzled and frustrated. The Digital Large Cap Fund (GDLC), managed by Grayscale, boasts a portfolio that includes popular assets such as Bitcoin, Ethereum, Solana, XRP, and Cardano, with approximately $775 million in assets under management.
Grayscale has taken a firm stance against the SEC’s imposition of the stay, citing that it violates the 240-day approval process mandated by US law. The firm highlights that the SEC had a deadline of 240 days after the application was filed to either approve or reject the proposal. With the deadline passing without a decision, Grayscale believes that the application should have been automatically approved, as per the statutory requirements.
In response to the SEC’s delays, Grayscale has expressed concerns about the impact on the firm and its investors. The asset management company has hinted at potentially filing petitions to lift the stay and proceed with launching the ETF despite the ongoing review process. Legal expert Scott Johnson suggests that Grayscale’s frustration with the SEC’s prolonged review indicates a desire to move forward with the product launch, especially with competitors like Bitwise’s BITW making strides in the market.
It is evident that Grayscale is keen on expediting the launch of its ETF to remain competitive in the evolving landscape of digital asset management. The firm’s proactive approach and determination to navigate regulatory challenges reflect its commitment to innovation and growth in the crypto industry.
As the situation unfolds, it will be interesting to see how Grayscale and the SEC navigate this regulatory hurdle and the potential implications for the digital asset market. Stay tuned for further developments on this story.
Mentioned in this article: Grayscale Asset Management, US Securities and Exchange Commission (SEC), Digital Large Cap Fund (DLCF), Exchange-Traded Fund (ETF), Bitcoin, Ethereum, Solana, XRP, Cardano, Bitwise (BITW)