Key dealers
- Gray scale challenges SEC’s authority to delay approval in addition to set limits.
- Grayscale says the Fund’s investors suffer from injury due to the shot public launch.
Grayscale Investments challenges SEC’s stay at the approval order for listing and trading in shares in its Grayscale Digital Large Cap Fund LLC (GDLC) on NYSE FACE.
The fund, which provides exposure to Bitcoin, Ethereum, XRP, Solana and Cardano, was approved of SEC’s department for commercial and markets on July 1.
But shortly thereafter the Commission Registered the exchange that the approval should be held due to an ongoing internal review.
On one letter Sent to Sec this week, Graysscale’s lawyers claimed that the Fund’s approval would stand by standard because the SEC missed its legal deadline to act on the proposal, and that the fund should be considered automatically approved by the Federal law.
The team also said that SEC cannot use its internal processes to ignore the legal deadline, and that it goes against the rules established by the congress.
“The Commission could remain on an appropriate record or override a law from the Commission itself, perhaps even a reputable document. But it would be out of the scope of Rule 431, which only concerns commission for documents made under a delegated authority, and could not override the 240-day decision outside the Congress for the Congress (2) (2) (2) (2) Representatives pronounced.
Gray scale emphasized that the delay is damaging GDLC and claims that they are unfairly affected by the SEC procedural pause.
The Asset Manager and Nyse Arca are considering formally producing Sec to lift the stay and let the fund start. However, the units urged the Commission to voluntarily acknowledge that the approval was legally final on July 2.
Despite the setback, the team noted that it recognized the latest positive development at the SEC, including the formation of a crypto working group, and confirmed their willingness to work with the agency.
Grayscale etf still on the right track despite sudden SEC -backslag
According to Scott Johnsson, General Partner at VB Capital, the delay was due to some major issues with Gray’s scale proposals. The delay of the last minute may have been caused by Commissioner Crenshaw, who has expressed skepticism about crypto in the past.
Crenshaw may have raised an objection shortly before the approval was completed, which forced the rest of the SEC to deal with the situation. However, Johnsson believes that the break is probably a procedural hiccup and the fund will debut soon.
That is why (sometimes) lawyers are worth it. They are right, you know. Given the gray scale, they suggested that they had productive conversations with Sec before approval, and they had made extensive changes to the rule proposal in line with these discussions, my guess is Rule 431 … https://t.co/kgpkanb9oy pic.twitter.com/v4imdg4xvz
– Scott Johnsson (@sgjohnsson) July 11, 2025
