Grayscale Challenges SEC with First-of-Kind Bitcoin Cash ETF Filing

Grayscale has submitted registration statements to the U.S. Securities and Exchange Commission (SEC) for three new exchange-traded funds (ETFs) focused on Bitcoin Cash (BCH), Hedera (HBAR), and Litecoin (LTC). The filings include an S-1 registration for the Hedera ETF and S-3 forms for the Litecoin and Bitcoin Cash ETFs. This move follows Grayscale’s recent application to convert its Chainlink Trust into an ETF, signaling a strategic expansion of its crypto investment offerings.

The Bitcoin Cash ETF filing is notable as the first of its kind formally submitted to the SEC. The fund, if approved, will be administered by the Bank of New York Mellon, with Coinbase acting as the prime broker and custodian. Similarly, the Litecoin ETF filing mirrors the structure of the Bitcoin Cash ETF, relying on the proposed Generic Listing Standards rather than individual SEC rule changes. Grayscale has indicated that it believes these funds meet the proposed listing criteria and could be eligible for trading on NYSE Arca once the standards are adopted.

The Hedera ETF filing, however, takes a different regulatory path. Grayscale submitted an S-1 form for this fund, and Nasdaq has already filed a 19b-4 application with the SEC to list and trade the ETF. Unlike the Bitcoin Cash and Litecoin offerings, Grayscale does not currently manage a Hedera Trust. The SEC is expected to make a decision on the Hedera ETF rule change by October 13 or November 12, depending on whether the timeline is extended. Another firm, Canary, has also applied for a Hedera ETF, with a final decision deadline set for November 8, indicating potential for simultaneous approvals.

These filings are part of a broader wave of crypto ETF applications from multiple issuers, including Fidelity and VanEck, as the industry seeks regulatory clarity and broader adoption. The SEC, under Chair Paul Atkins, has delayed decisions on several crypto ETF applications, extending the timeline for market participants awaiting approval. If the Generic Listing Standards are adopted, it could streamline the approval process for future crypto ETFs, reducing the typical 240-day review period to as few as 60–75 days.

Grayscale’s strategy aligns with recent regulatory developments, including the SEC’s August 2025 approval of in-kind creation and redemption mechanisms for crypto ETFs. This decision marked a key step toward operational efficiency and regulatory alignment with commodity-based funds. The adoption of generic listing standards would further reduce barriers for issuers, enabling faster market entry for altcoin ETFs and fostering innovation in digital asset investment products.

The potential approval of these ETFs could significantly impact the crypto market by providing institutional and retail investors with a regulated avenue to access digital assets. This could enhance market transparency, custody standards, and investor confidence, addressing some of the concerns regulators have historically raised about crypto-related investments. As of late 2025, the regulatory landscape for digital assets remains fluid, with the SEC’s decisions on the Generic Listing Standards and specific ETF applications expected to shape the trajectory of crypto’s integration into mainstream finance.