Grayscale Urges SEC to Allow Multi-Crypto ETF to Proceed

Grayscale Investments has called on the U.S. Securities and Exchange Commission (SEC) to allow the launch of its multi-crypto ETF—the Grayscale Digital Large Cap Fund—arguing that further delays violate statutory deadlines and harm investors.

In a formal letter sent on July 8, 2025, to SEC officials, Grayscale asserted that the Commission’s stay on a delegated approval order issued July 1 does not override a key deadline established by Congress. The firm says that under Section 19(b)(2)(D) of the Securities Exchange Act, the proposal should be considered “deemed approved” as of July 2—240 days after its publication in the Federal Register.

Legal timeline and procedural conflict

The proposal to list the fund on NYSE Arca was initially filed on October 15, 2024. On July 1, 2025, the SEC’s Division of Trading and Markets granted approval under delegated authority. However, later that same day, a Commissioner requested review, automatically triggering a stay under Rule 431(e).

Grayscale argues that while the stay may freeze decisions made under delegated authority, it cannot nullify the hard statutory deadline imposed by Congress. The firm points out that the SEC’s internal rules, including Rule 431, do not permit extensions beyond the 240-day limit for a final decision. According to Grayscale, failure to meet that deadline results in automatic approval by law.

Investors at risk as SEC delays decision

The asset manager warns that continued delays are actively harming the fund, the exchange, and existing investors. While considering a formal petition to lift the stay, Grayscale emphasized that the SEC should acknowledge the fund’s approval as automatic under federal law.

READ MORE:

Trump Imposes 50% Tariff on Brazil: Political Tensions and Censorship at the Center

The letter also highlighted concerns that the Commission has previously used similar procedural tactics to stall other proposals, often with no follow-up for months or years. Grayscale called these delays unacceptable and inconsistent with the spirit of the Dodd-Frank reforms that established the 240-day rule.

Pushing for clarity in crypto regulation

Despite its frustrations, Grayscale acknowledged recent SEC efforts to improve crypto regulation, including the formation of a dedicated Crypto Task Force. The firm expressed its desire to work cooperatively with the agency and continue serving as a resource in shaping clear, investor-friendly digital asset policies.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.